Mean Reversion Refers to the Fact That

question 75

Multiple Choice

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.

---

Definitions:

Long-Term Potentiation

A long-lasting enhancement in communication between neurons following a short, intense stimulation, believed to be a cellular basis for learning and memory.

Neural Basis

Neural basis pertains to the underlying neurological structures and functions that support cognitive processes, behaviors, and emotions.

Rehearsal

A cognitive process in which information is repeated over and over as a possible way of learning and remembering it.

Stress Hormones

Chemicals released in the body in response to stress, such as cortisol and epinephrine, that prepare the body for a fight or flight response.