The January Effect

question 6

Multiple Choice

The January effect:

• A)does not occur in the domestic market every year.
• B)occurs every year but only for large-company stocks.
• C)occurs every year but only for small-company stocks.
• D)is unaffected by institutional investors.
• E)is unique to the United States.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Common Stock Account

An equity account that represents the ownership interests of common shareholders in a corporation, reflecting the invested capital and retained earnings.

Reverse Stock Split

A reverse stock split is a consolidation of shares that decreases the total number of outstanding shares and increases the share price proportionately.

Market Value

The existing price for buying or selling an asset or service in the marketplace.