Session 31_ Post-class test

A stocks are more likely to go up after a down year

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Unformatted text preview: r for market timing? a. If January is a positive month for stocks, the returns in the remaining eleven months of the year are also likely to be positive. b. If January is a positive month for stocks, the returns in the remaining eleven months of the year are likely to be negative. c. If January is a positive month for stocks, the returns for the year are also likely to be positive. d. If January is a positive month for stocks, the returns for the year are likely to be negative. e. None of the above Explain the implications for using this indicator in investing. Explanation: Even if January is positive, the returns for the remaining eleven months are up in the air, but the positive January returns do push you into positive territory. Since you don’t get to observe January returns until January is done, it is not useful as a mark...
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