Academic research has found that share prices of companies that are removed from a major stock index:

Question

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Academic research has found that share prices of companies that are removed from a major stock index usually drop immediately, but the decline is usually reversed within one or two months. The drop is attributed to index funds that sell the stock upon deletion from the index. However, active investors may see this as an opportunity to buy undervalued securities, causing the reversal of the decline.

Academic Research Has Found That Share Prices of Companies That