Which One of the Following Statements Describes an Investment Strategy

question 65

Multiple Choice

Which one of the following statements describes an investment strategy that may lead to profitable results based on current research findings?

• A)selling stocks as soon as positive earnings surprises are announced
• B)selling stocks on Mondays only
• C)selling small-company stocks in December and repurchasing them in February
• D)selling stocks on the 25th of the month and repurchasing them on the 5th of the following month
• E)buying stocks with relatively low P/E ratios

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Definitions:

Good Substitutes

Products or services that can be used in place of one another, satisfying the same needs or wants of the consumer.

Elastic

Describes demand or supply that is highly sensitive to changes in price; a small change in price leads to a large change in the quantity demanded or supplied.

Perfectly Inelastic

Describing a situation where demand or supply does not change in response to changes in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price.