Mean Reversion Refers to the Observation That

question 24

Multiple Choice

Mean reversion refers to the observation that

• A) stock prices overact to news announcements.
• B) stocks prices are more volatile than fluctuations in their fundamental value would predict.
• C) stocks with low returns are likely to have high returns in the future.
• D) stocks with low returns are likely to have even lower returns in the future.

---

Definitions:

Ineffective

Lacking the ability or success in producing a desired or intended result.

Time Efficient

Making the best possible use of time to ensure task completion or goal achievement with minimal wasted time.

Cultural Heritage

The legacy of physical artifacts and intangible attributes of a group or society inherited from past generations.

Sociohistorical Heritage

The social and historical background or traditions that influence a person or community.