Chartered Financial Analyst Level 1
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The observation that a large-capitalization company's stock price is inflated after the company releases unexpected good news at year end is most likely related to the:
A
value effect, which refers to the outperformance of value stocks with below-average price-to-earnings and market-to-book ratios over time, unrelated to information releases.
B
overreaction effect, where investors tend to overreact to unexpected public information, causing stock prices to overshoot their intrinsic value.
C
turn-of-the-year effect, a calendar anomaly where stock returns in January are significantly higher, unrelated to information releases.