Luxury jewelry retailer tiffany & co posted first quarter earnings that substantially beat…

Luxury jewelry retailer tiffany & co posted first quarter earnings that substantially beat analysts’ estimates. Operational earnings ” more than doubled to 48 cents a share” while analysts expected the company to make only 37 cents a share. tiffany’s stock price moved 7.5 percent higher on the news.

The largest category of sales increase was for items priced above US$50,000, primarily engagement and celebration rings. However, overall sales were robust with U.S. stores posting a 13 percent increase over the previous year. tiffany now expects to earnings per share to fall between US$2.55 and $2.60 for the year. A previous consensus forecast from 20 analysts expected the company to post earnings of US$2.50 per share.

1. when markets react instantaneously to the release of new information it is a sign of

a. illegal trading

b. market efficiency

c. market segregation

d none of the above

2. Stock prices tend to already reflect _______ EPS when markets are efficient

a. expected

b. unexpected

c. moderate

d none of the above