Suppose Apple publicly announces earnings today and the announcement is above market expectations. If markets are semistrong-form efficient, then:

Question

BlackTom AI · Accepted Answer

Semistrong-form efficiency states that all publicly available information is rapidly and correctly reflected in stock prices. Under this form of the efficient market hypothesis (EMH), new public announcements (like earnings) that are unexpected will be incorporated into the stock price almost immediately.

Step-by-step reasoning:
1. Identify the information: Apple announces earnings today that are above market expectations. This is new, public, and economically positive (a positive earnings surprise).
2. Apply semistrong EMH: Because the surprise is public, market participants will update valuations quickly. The rational immediate response to a positive surprise is an upward adjustment in price to reflect higher expected future cash flows or reduced downside risk.
3. Consider pre-announcement movement: If some of the information leaked earlier (insider information or rumor), prices could have risen before the official announcement. That possibility does not contradict semistrong EMH; it reflects that the information became public (or semi-public) earlier.
4. Consider post-announcement drift: Semistrong EMH predicts no predictable, sustained abnormal returns after the information is public. Therefore, after the immediate adjustment, there should not be continued upward drift next week attributable to that same announcement.

Why the correct choice is correct:
- It captures the immediate positive reaction to an unexpected good earnings announcement, allows for earlier movement if leaks occurred, and rules out continued predictable drift afterward—exactly what semistrong efficiency implies.

Why other options are incorrect:
- Option A: Misstates semistrong EMH—prices will react to new public information that was not already expected.
- Option C: A decrease today followed by an increase next week contradicts rational pricing for a positive surprise and implies predictable reversal/drift.
- Option D: Claims delayed incorporation of public information, which conflicts with the rapid adjustment implied by semistrong EMH.

Conclusion: The correct answer is that Apple stock should increase today and may have increased earlier if information leaked, but should not continue drifting upward next week—matching the provided answer.

Suppose Apple publicly announces earnings today and the announcement is above market expectations. If markets are semistrong-form efficient, then:单项选择题

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