Difference between actual and consensus earnings, Financial Accounting

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Difference between actual and consensus earnings

Response to the following questions:

1. a. What is meant by an earnings surprise?

b. Describe the typical stock price response to an earnings surprise.

2. Why in measuring earnings surprise is the difference between actual and consensus earnings deflated?

If possible, please give examples to better understand your answers.

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Financial Accounting: Difference between actual and consensus earnings

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Financial Accounting: Difference between actual and consensus earnings

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