Suppose Apple Announces That Its Earnings for the Fourth Quarter

question 3

Multiple Choice

Suppose Apple announces that its earnings for the fourth quarter of 2013 rose to $2 billion. As a result of this announcement the price of Apple's stock does not change. The best explanation of this is

• A)market participants were expecting Apple's earnings to be greater than $2 billion.
• B)market participants expected Apple's earnings to be $2 billion.
• C)market participants expected Apple's earnings to be less than $2 billion.
• D)market participants have adaptive expectations.

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Definitions:

Tears

A secretion from the lacrimal glands used to lubricate the eyes, cleanse them from irritants, and provide antibacterial protection.

Optic Nerve

A paired nerve that transmits visual information from the retina to the brain.

Blind Spot

The point in the visual field that corresponds to the lack of light-detecting photoreceptor cells on the optic disc of the retina where the optic nerve passes through.

Macula Lutea

A small, yellowish central area of the retina that is rich in cones and mediates clear detailed vision.