A Study by Ball,Kothari and Shanken (1995)examines the Reversal Effect

question 18

Multiple Choice

A study by Ball,Kothari and Shanken (1995) examines the reversal effect and finds

• A) the reversal effect seems to be concentrated in low-priced shares.
• B) the reversal effect is substantially diminished when portfolios are formed based on mid-year performance rather than December results.
• C) the risk-adjusted return from trying to exploit the reversal effect is effectively zero.
• D) all of these are true.
• E) none of these.

---

Definitions:

Stanford-Binet

An intelligence test that measures cognitive abilities across five factors, used to assess intellectual development and potential.

Wechsler

Refers to a series of standardized tests used to evaluate cognitive abilities and intellectual abilities, including the Wechsler Adult Intelligence Scale (WAIS).

Tacit Knowledge

Knowledge that is difficult to transfer to another person by writing it down or verbalizing it, often acquired through personal experience.

Formal Academic Knowledge

Structured and systematic knowledge acquired through formal education systems, such as schools and universities.