Session 10_ Post-class test

D the monday return should be most negative for

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Unformatted text preview: by institutions than large market cap stocks d. Small cap companies are followed by fewer analysts than large market cap companies e. All of the above. Explanation: All of the above have been offered as explanations for the small cap premium though none of them individually seems to explain it fully. Small companies may be riskier and less liquid than larger companies, and the lack of analyst/ institutional following does make them more susceptible to unexpected surprises. 3. Looking at returns across the weekdays, it seems likely that Mondays have been the worst day of the week to invest in stocks over the last few decades. One explanation that is offered for the Monday effect is that companies report a disproportionate amount of bad news after the close of trading on Friday and that the Monday reaction reflects the bad news. If this story holds, which of the following would you expect to see in Monday returns? a. Almost all of the negative return should come from stocks opening lower on Monday than from returns over the course of the day. b....
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This note was uploaded on 10/10/2013 for the course ECON 304 taught by Professor Aswathdamodaran during the Spring '12 term at NYU.

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