CFA Practice Question

CFA Practice Question

Which of the following is not correct for event studies?
A. Stocks recently listed on exchanges at an average show price declines which are not consistent with semi-strong EMH.
B. IPOs provide average positive abnormal returns to their buyers for about a month post issue.
C. Most studies of stock splits (like FFJR) support semi-strong EMH.
Explanation: Most of the average positive abnormal returns to buyers lasts for a day (price adjustment to under-pricing lasts about a day).

User Contributed Comments 2

User Comment
JCopeland I've seen event studies that show a correlation between abnormal price appreciation and new exchange listings (NYSE).
scottm8571 Asked LinkedIn how long it lasts.....
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