Which of the following is empirical evidence indicating that the efficient market hypothesis may not always be generally applicable?
A) Small-firm effect
B) January effect
C) Market overreaction
D) All of the above

Question

Quizplus · Accepted Answer

All three options, small-firm effect, January effect, and market overreaction, provide empirical evidence that contradicts the efficient market hypothesis. The small-firm effect suggests that small-cap stocks may generate abnormal returns despite the idea that markets are efficient. The January effect shows that there is a seasonal pattern of higher returns in January, which cannot be explained by the efficient market hypothesis. Finally, the market overreaction phenomenon indicates that market participants can overreact to news, leading to temporary price discrepancies. All of these phenomena suggest that markets may not always be efficient in the way that the efficient market hypothesis predicts.

Which of the Following Is Empirical Evidence Indicating That the Efficient