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Some recent studies on the P/E ratio find that the return predictability is concentrated around subsequent earnings ahnouncement dates. For example, a firm with a

Some recent studies on the P/E ratio find that the return predictability is concentrated around subsequent earnings ahnouncement dates. For example, a firm with a high P/E ratio in April 2017 is likely to have low stock returns around subsequent quarterly earnings announcements (e.9., in July and October 2017). What is a plausible nterpretation of this evidence

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