Share prices tend to move together if they are affected b?

Question

Quizplus · Accepted Answer

When companies are affected by common economic events such as changes in interest rates, inflation or economic growth, their share prices tend to move in the same direction as other companies in the same industry or sector. This is because these events affect the overall market conditions and investor sentiment, leading to similar reactions among investors in different companies. On the other hand, company-specific events or idiosyncratic shocks that affect individual companies only will not have the same effect on other companies' share prices. Therefore, option A is the best choice.

Share Prices Tend to Move Together If They Are Affected