The SUE effect suggests that superior performance is associated with stocks:
A) exhibiting strong recent price performance.
B) exhibiting weak long-term past price performance.
C) that have beat their earnings estimate.
D) that have low price multiples.

Question

Quizplus · Accepted Answer

The SUE (Standardized Unexpected Earnings) effect indicates that stocks which have exceeded their earnings estimates tend to show superior performance, as they often experience positive investor sentiment and increased demand.

The SUE Effect Suggests That Superior Performance Is Associated with Stocks