DeBondt and Thaler (1985) found that the poorest-performing stocks in one time period experienced performance in the following period and that the best-performing stocks in one time period experienced performance in the following time period.

A) good; good
B) good; poor
C) poor; good
D) poor; poor

Question

DeBondt and Thaler (1985) found that the poorest-performing stocks in one time period experienced ________ performance in the following period and that the best-performing stocks in one time period experienced ________ performance in the following time period.

A) good; good
B) good; poor
C) poor; good
D) poor; poor

Hamza Yaqoobi · Accepted Answer

Final Answer : B, Explanation :  DeBondt and Thaler (1985) discovered a tendency for stocks that performed poorly in one period to rebound and perform well in the subsequent period, and conversely, for stocks that performed exceptionally well in one period to underperform in the following period. This phenomenon is often cited as evidence of market overreaction and subsequent correction.

DeBondt and Thaler (1985) found that the poorest-performing stocks in one time period experienced performance in the following period and that the best-performing stocks in one time period experienced performance in the following time period.

A) good; good
B) good; poor
C) poor; good
D) poor; poor

Definitions

Learning Objectives

Learning Objectives

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