Empirical Evidence Shows That New Issues of Equity by Domestic

question 12

Multiple Choice

Empirical evidence shows that new issues of equity by domestic firms in the U.S.market typically has a ________ stock price reaction and new equity issues in the U.S.markets by foreign firms with segmented domestic markets have a ________ stock price reaction.

• A) negative; negative
• B) positive; negative
• C) negative; positive
• D) positive; positive

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Definitions:

Frustration-Aggression Hypothesis

A psychological theory proposing that aggression is often the result of blocking, or frustrating, a person's efforts to attain a goal.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, drama, or verbal expression.

Stereotype Threat

Feeling that we will be judged and treated in terms of negative stereotypes of our group, and that we will inadvertently confirm these stereotypes through our behaviour.

Confirming Stereotypes

The act of behaving in a way that reinforces existing stereotypes.