If markets are efficient then stock prices


1. The January effect relates to the ________________ of _______________ in the month of January.

a. abnormal returns; large stocks

b. abnormal returns; small stocks

c. arbitrage; small stocks

d. arbitrage; large stocks

2. If markets are efficient, then stock prices will:

a. overreact to new and relevant information.

b. underact to new and relevant information.

c. not react to new and relevant information.

d. reflect all new and relevant information quickly.

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Financial Management: If markets are efficient then stock prices
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