One of the calendar effect market anomalies indicates that _________ in value during January.A) large cap stocks tend to declineB) equities in general tend to declineC) small cap stocks tend to increaseD) equities in general tend to increase

Respuesta :

Answer:

The correct answer is C) small cap stocks tend to increase.

Explanation:

The term anomaly has different meanings depending on the scope to which reference is made. Thus, within the field of financial theory, all those behaviors of stock market returns that cannot be explained by existing financial theory are considered anomaly. The knowledge of these irregularities implies that, if we followed a certain investment strategy, we could obtain extraordinary returns. In this way, the existence of anomalies in stock returns questions the efficiency of the stock market as it is possible to predict, in certain cases, the evolution of expected returns.

The anomalies are characterized by phenomena that persist over time, that is, once they have been detected and used by investors to obtain an extraordinary benefit, they do not disappear like other small inefficiencies that may exist in the markets, but remain , thus contradicting market efficiency.