(Answered) Announcements of good news or bad news earnings for the

Finance

Announcements of good news or bad news earnings for the recently completed fiscal quarter usually create fairly small abnormal stock price changes on the day of the announcement.

Required:

a. Discuss how stock price changes over the preceding days or weeks help explain this phenomenon.

b. Discuss the types of information that the market might have received in advance of the earnings announcement.

c. How does the relatively small price reaction at the time of the earnings announcement relate to the price changes that are observed in the days or weeks prior to the announcement?

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