The January effect:
A) applies to the entire stock market.
B) is diminishing and does not occur every year.
C) occurs every year but only in small-company stocks.
D) is unaffected by institutional investors.
E) is totally offset by the October effect.

Question

Quizplus · Accepted Answer

The January effect is a phenomenon where small-cap stocks tend to outperform the broader market in January. However, its occurrence has been diminishing and it does not happen every year. Thus, option B is the correct choice. Options A, C, and D are not accurate, while option E is not relevant as it talks about the offsetting of the January effect, which is not true.

The January Effect