Stocks tend to move together if they are affected by ________.
A) company specific events
B) common economic events
C) events unrelated to the economy
D) idiosyncratic shocks

Question

Quizplus · Accepted Answer

If stocks are affected by common economic events, such as changes in interest rates, inflation, or overall market conditions, they are likely to move together. Company specific events (A) like earnings reports or management changes can affect individual stocks differently. Events unrelated to the economy (C) like natural disasters or geopolitical tensions may also have differing effects on individual stocks. Idiosyncratic shocks (D) refers to unique events that only affect individual companies, and would not cause stocks to move together.

Stocks Tend to Move Together If They Are Affected by ________