The best definition of overreaction is Multiple Choice Situation in which security prices reflect available information, Statistical measure of maximum loss used by banks and other financial institutions to manage risk exposures The price instantaneously adjusts to and fully reflects new information there is no tendency for subsequent increases and decreases The price partily adjusts to the new information: 10 days elapse before the price completely reflects the new information The price over adjusts to the new Information it overshoots the new price and subsequently corrects