The tendency of poorly performing shares and well performing shares in one period to continue their performance into the next period is called the ________.
A)fad effect
B)martingale effect
C)momentum effect
D)reversal effect

Question

Quizplus · Accepted Answer

The tendency of poorly performing shares and well performing shares in one period to continue their performance into the next period is called the momentum effect. There is no such thing as the fad effect or the martingale effect. The reversal effect refers to the inverse of the momentum effect, where poorly performing shares in one period tend to perform well in the next period and well performing shares tend to perform poorly.

The Tendency of Poorly Performing Shares and Well Performing Shares