Which of the Following Statements Is True Regarding Post-Earnings-Announcement Drift

question 47

Multiple Choice

Which of the following statements is true regarding post-earnings-announcement drift?

• A)Security prices do not react significantly at the time of earnings announcements.
• B)At least part of the blame for this effect has been laid at the feet of financial analysts.
• C)This effect is more important for larger firms than for smaller firms.
• D)Security prices never fully reflect the effects of earnings announcements.

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Definitions:

Shares in the Corporation

Financial instruments that represent ownership stakes in a corporation, entitling the holder to a portion of the residual profits through dividends.

Living Unit

A residential space, such as an apartment or house, designed for occupancy by individuals or families.

Waste

The degradation of value or condition of a property, often due to neglect or misuse.

Realty

Refers to real estate or real property, encompassing land and anything permanently attached to it, such as buildings.