Question
5. Are these two statements correct? Statement 1: Post earnings announcement drift (PEAD) is the anomaly where an immediate stock reaction occurs in the same
5. Are these two statements correct? Statement 1: Post earnings announcement drift (PEAD) is the anomaly where an immediate stock reaction occurs in the same direction as an earnings surprise, but that the market tends to reverse these gains over the next few months following the announcement. Statement 2: The January effect is the anomaly where stocks perform much better in January (on average) than in the other months of the year. The January effect is strongest for large stocks and for stocks that experienced high returns the previous year. A. Both statements are correct. B. Both statements are incorrect. C. Only Statement 1 is correct. D. Only Statement 2 is correct.
6. Are this statement correct? Statement 1: An investor following the Dogs of the Dow strategy will invest in the ten Dow Jones Industrial Average stocks with the highest dividend yields. A. Statement 1 is correct. B. Statement 2 is incorrect.
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