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

Question

Quizplus · Accepted Answer

The fact that the price of Apple's stock did not change suggests that the market participants were already expecting earnings to be around $2 billion. If the earnings had exceeded expectations, the stock price would have likely gone up, and if the earnings had fallen short of expectations, the stock price would have likely gone down. Therefore, option B is the best explanation.

Suppose Apple Announces That Its Earnings for the Fourth Quarter