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258 Frederic S. Mishkin Economics of Money, Banking, and Financial Markets, Seventh Edition

99)

The January effect refers to

(a)

the fact that most stock market crashes have occurred in January.

(b)

the fact that stock prices tend to fall in January.

(c)

the fact that stock prices have historically experienced abnormal price increases in January.

(d)

the fact the football team winning the Super Bowl accurately predicts the behavior of the stock market for the next year.

(e)

the fact that stock prices are excessively volatile only in the month of January.

Answer:

Question Status: New

100)

A phenomenon closely related to market overreaction is

(a)

the random walk.

(b)

the small-firm effect.

(c)

the January effect.

(d)

mean reversion.

(e)

excessive volatility.

Answer:

Question Status: New

101)

Excessive volatility refers to the fact that

(a)

stock returns display mean reversion.

(b)

stock prices can be slow to react to new information.

(c)

stock price tend to rise in the month of January.

(d)

stock prices fluctuate more than is justified by dividend fluctuations.

(e)

all of the above.

Answer:

Question Status: New

102)

Mean reversion refers to the fact that

(a)

small firms have higher than average returns.

(b)

stocks that have had low returns in the past are more likely to do well in the future.

(c)

stock returns are high during the month of January.

(d)

stock prices fluctuate more than is justified by fundamentals.

(e)

markets overreact.

Answer:

Question Status: New

103)

Evidence in support of the efficient markets hypothesis includes

(a)

the failure of technical analysis to outperform the market.

(b)

the small-firm effect.

(c)

the January effect.

(d)

excessive volatility.

(e)

all of the above.

Answer:

Question Status: New

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