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The following graph shows the behaviour of average cumulative abnormal return for a sample of companies
that announced positive earnings forecasts. It presents daily cumulative abnormal return for 21 days, from day
-10 to day + 10 where day 0 is the earnings forecast announcement day.
Cumulative abnormal return
Day relative to announcement day
Explain whether the behaviour of cumulative abnormal return in this graph is consistent with the efficient market
hypothesis. If not, explain what behavioural bias/critique is reflected in the above graph.
Subject: Business, Finance

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