- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 38. Market Efficiency
- Subject 3. Market Pricing Anomalies
CFA Practice Question
Robert Haugen, in The New Finance: The Case against Efficient Markets, argued that the evidence implies investors initially underestimate firms showing strong performance and then overreact. Haugen was referring to the anomaly of ______.
A. market momentum
B. earning surprises
C. the value effect
Explanation: Haugen concluded that the market overreacts, with a lag, and that "we apparently have a market that is slow to overreact."
User Contributed Comments 3
| User | Comment |
|---|---|
| BladeMage3 | Is this really earning surprise? I thought this was A. |
| chcarnes | Same blademage |
| thanhb91 | Robert Haugen is not even mention in the textbook, how do we suppose to know? |