OVERREACTION AND UNDERREACTION IN STOCK MARKETS: A REVIEW
Journal: IMPACT : International Journal of Research in Business Management ( IMPACT : IJRBM ) (Vol.3, No. 3)Publication Date: 2015-03-31
Authors : VINEETHA S DAS; K KRISHNAKUMAR;
Page : 49-56
Keywords : Market Efficiency; Overreaction; Underreaction; Behavioural Finance;
Abstract
Contrary to the conventional belief that the markets are rational and efficient (Fama E, 1970), investors overreact to both good and bad news. This may cause unjustifiable up and down movements in the stock price and enable investors to make irrational, short-term profits. The prices won't reflect the true value of the stock when the market is inefficient and hence this will be followed by a correction in the prices. Persistent overweighting of recent information and underweighting of long-term fundamentals by irrational investors will result in overreaction. This happens in the case of overconfident informed investors. This paper is a review of the works that analyse the overreaction in stock market
Other Latest Articles
- PRODUCTION PROCESS OF COIR AND COIR PRODUCTS
- A STUDY OF TOURIST BEHAVIOR IN FAVOR OF TOURISM PRODUCTS TO PROMOTE TOURISM MARKETING
- ENHANCING NIGERIAN ORGANISATIONS’ COMPETITIVENESS THROUGH CORPORATE ENTREPRENEURSHIP, THE VRIO-MODEL ANALYSIS
- A STUDY ON FINANCIAL DERIVATIVES (FUTURES & OPTIONS)
- FACTORS INFLUENCING WOMEN’S DECISION MAKING POWER: EVIDENCE FROM BANGLADESH URBAN HEALTH SURVEY DATA
Last modified: 2015-04-10 20:59:46