Relative to various expected return benchmarks

Assignment Help Financial Management

Reference no: EM131057067

LaPorta, Lakonishok, Shleifer, and Vishny (“Good News for Value Stocks,” Journal of Finance, June 1997) study the returns on stocks on the few days surrounding their quarterly earnings announcements (relative to various expected return benchmarks). They find that on average, high-B/M stocks earn 0.9% around an earnings announcement. In contrast, low-B/M stocks earn an average of -0.1% around an earnings announcement. The difference is statistically significant. Discuss whether this result is more consistent with the irrational expectations (behavioral) view, or the risk factor (efficient markets) view of the book-tomarket effect, and explain your logic.

Reference no: EM131057067

Questions Cloud

Hydrogen ion concentration : What would the hydrogen ion concentration be if the pOH was 8. What would the hydroxide ion concentration be if the hydrogen ion concentration was 1 x 10-3 M? What would the pH of a solution that had a hydroxide ion concentration of 1 x 10-5 M be?

Describe the type of misconduct you are reporting : Provide the name and website of the company or organization and provide a brief overview of its demographics. Be sure to identify the core business of the company.

You balance human error and negligence : How do you balance human error and negligence? Your response must encompass the core course concepts including patient safety, error, and personal accountability. Describe and explain utilizing course readings and citations from scholarly resourc..

Write the half-reactions : A voltaic cell is constructed with an Ag/Ag^+ half-cell and a Pb/Pb^2+ half-cell. a) Which metal will serve as the anode and which as the cathode? Justify your answer quantitatively b) Write a cell reaction for this cell. Write the half-reactions and..

Relative to various expected return benchmarks : LaPorta, Lakonishok, Shleifer, and Vishny (“Good News for Value Stocks,” Journal of Finance, June 1997) study the returns on stocks on the few days surrounding their quarterly earnings announcements (relative to various expected return benchmarks).

Determine the resulting friction head loss : Determine the resulting friction head loss assuming that the friction factor remains the same and that the total flow rate is unchanged.

What do advocates of narrative analysis prefer to study : Why are Coffey & Atkinson critical of the way coding fragments qualitative data? What do advocates of narrative analysis prefer to study?

Concept of chemical bonds and valence : Describe the concept of chemical bonds and valence. Include in your discussion why firefighters should be concerned with CO. Your response must be at least 200 words in length.

What is the profitability index for the set of cash flows : What is the profitability index for the set of cash flows if the relevant discount rate is 10 percent? Profitability index What is the profitability index for the set of cash flows if the relevant discount rate is 22 percent?

User Account

All Pages