QQAG Just Announced Yesterday That Its Fourth Quarter Earnings Will

question 24

Multiple Choice

QQAG just announced yesterday that its fourth quarter earnings will be 35% higher than last year's fourth quarter. You observe that QQAG had an abnormal return of 1.7% yesterday. This suggests that

• A) the market is not efficient.
• B) QQAG stock will probably rise in value tomorrow.
• C) investors expected the earnings increase to be larger than what was actually announced.
• D) investors expected the earnings increase to be smaller than what was actually announced.
• E) earnings are expected to decrease next quarter.

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Definitions:

Culture-Free

Descriptive of a test in which cultural biases have been removed.

Culture-Biased

A tendency to interpret or judge phenomena in a way that is influenced by one's own cultural background or societal norms.

Cultural Biases

Prejudices or predispositions toward certain cultures or cultural practices, often stemming from one's own cultural context.

Culture-Consistent

Behaviors, practices, or beliefs that are in harmony with the norms and values of a specific culture.