Music Doctors Just Announced Yesterday That Its First Quarter Sales

question 38

Multiple Choice

Music Doctors just announced yesterday that its first quarter sales were 35% higher than last year's first quarter. You observe that Music Doctors had an abnormal return of −2% yesterday. This suggests that

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

---

Definitions:

Skills Valued

Abilities or proficiencies that are highly regarded and sought after in various contexts, such as in the workplace or personal life.

Culture

A system of shared beliefs, norms, behaviors, and expectations that persist over time and prescribe social behavior and assumptions.

Serious Stressor

A significant event or situation that causes considerable stress, potentially leading to long-term psychological or physical effects.

Primary

First in order or importance; fundamental.