Studies of Share Price Behavior Related to Stock Splits Show

question 39

Multiple Choice

Studies of share price behavior related to stock splits show

• A) typically abnormally high returns before the split, but not after the split.
• B) abnormally low returns prior to the split announcement.
• C) abnormally high returns after the split.
• D) large increase in trading volume after the split.

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Definitions:

Maximin Strategy

A decision-making strategy used in game theory and economics where the player seeks to maximize their minimum payoff, accounting for the worst-case scenario.

Dominant Strategy

In game theory, a strategy that always results in the most favorable outcome for a player, regardless of what the opposition does.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies while the other players keep their strategies unchanged.

Maximin Strategy

A decision-making rule used in game theory and statistics to maximize the minimum gain that can be achieved.