Suppose the key officer of a company suddenly begins selling his or her stock and that fact is subsequently reported in The Wall Street Journal. This is an example of:

Question

Quizplus · Accepted Answer

The scenario described does not fit the definitions of the weekend effect, the small-firm effect, weak form efficiency, or the corporate sales hypothesis. The weekend effect refers to the tendency for stock returns to be lower on Mondays, the small-firm effect is about smaller firms having higher risk-adjusted returns, weak form efficiency is a form of market efficiency where all past trading information is already reflected in stock prices, and the corporate sales hypothesis is not a recognized term in financial theory. The action of a key officer selling stock and it being reported could imply insider information or other factors not covered by the options provided.

Suppose the Key Officer of a Company Suddenly Begins Selling