Question
How can a mutual fund manager who follows a momentum trading strategy expect to earn above-average return? A.If the fund manager follows a momentum strategy
How can a mutual fund manager who follows a momentum trading strategy expect to earn above-average return?
A.If the fund manager follows a momentum strategy and buys a stock as the price is increasing and other investors also follow a momentum strategy, then it is likely the stock price will continue to rise.
B. Provided the stock price have been rising above the mean reversion point and other investors follow a mean-reversion strategy, the fund manager is likely to earn an above-average return.
C. If the fund manager follows a momentum strategy and buys a stock as the price is increasing while other investors follow a mean reversion strategy, then it is likely the stock price will continue to rise
D. Provided the stock price decreased below the mean reversion point and other investors follow a momentum strategy, the fund manager is likely to earn an above-average return.
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