The lack of adequate trading volume in stock that may ultimately lead to its ability to produce excess returns is referred to as the ________.
A) January effect
B) liquidity effect
C) neglected-firm effect
D) P/E effect

Question

Quizplus · Accepted Answer

The liquidity effect refers to the impact of trading volume on a stock's ability to produce returns. Low trading volume can lead to higher transaction costs and price volatility, affecting the stock's performance.

The Lack of Adequate Trading Volume in Stock That May