Mean Reversion in Stock Prices

question 38

Multiple Choice

Mean reversion in stock prices

• A) results from efficient market arbitrage
• B) makes stock prices fundamentally unpredictable
• C) depends on an infinitely elastic demand for shares
• D) lacks empirical credibility
• E) implies that deviations from trends set by economic fundamentals are temporary and inefficient

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Definitions:

Expectancy Theory

A hypothesis in motivational theory stating that the strength of an individual's motivation to perform a particular action is determined by their expectation that the action will lead to a specific outcome and the value they place on that outcome.

Required Task

The responsibilities and duties assigned to an employee as part of their job role.

Organizational Justice

The perception of fairness within an organization, influencing employee satisfaction, motivation, and productivity.

Distributive Justice

The perceived fairness in the allocation of resources or rewards among individuals or groups within a society or organization.