the economics of money, banking, and financial markets

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16. 
    

    Excessive volatility refers to the fact that ____.
    A) stock returns display mean reversion
    B) stock prices can be slow to react to new information
    C) stock price tend to rise in the month of January
    D) stock prices fluctuate more than is justified by dividend fluctuations
    Answer: D
    Diff: 1 Type: MC Page Ref: 7A.1- 5
    Topic: Questions for Web Appendix on the Efficient Market Hypothesis
    Skill: Recall
    Objective List: Appendix: Evidence on the Efficient Market Hypothesis

    
    


17. 
    

    Mean reversion refers to the fact that ____.
    A) small firms have higher than average returns
    B) stocks that have had low returns in the past are more likely to do well in the future
    C) stock returns are high during the month of January
    D) stock prices fluctuate more than is justified by fundamentals
    Answer: B
    Diff: 1 Type: MC Page Ref: 7A. 1 - 5
    Topic: Questions for Web Appendix on the Efficient Market Hypothesis
    Skill: Recall
    Objective List: Appendix: Evidence on the Efficient Market Hypothesis