Many stock analysts assume that a mispriced stock will
A) immediately return to its intrinsic value.
B) return to its intrinsic value within a few days.
C) never return to its intrinsic value.
D) gradually approach its intrinsic value over several years.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Stock prices tend to gradually adjust to their intrinsic values over time due to market participants reacting to new information and adjusting their valuations accordingly. This process is not immediate but unfolds over months or years as perceptions and realities align.

Many Stock Analysts Assume That a Mispriced Stock Will