| Abnormal return | Return on a stock beyond what would be predicted by market movements alone. Cumulative abnormal return (CAR) is the total abnormal return for the period surrounding an announcement or the release of information.
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| Anomalies | Patterns of returns that seem to contradict the efficient market hypothesis.
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| Book-to-market effect | The tendency for stocks of firms with high ratios of book-to-market value to generate abnormal returns.
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| Cumulative abnormal return | See abnormal return.
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| Efficient market hypothesis | The prices of securities fully reflect available information. Investors buying securities in an efficient market should expect to obtain an equilibrium rate of return. Weak-form EMH asserts that stock prices already reflect all information contained in the history of past prices. The semistrong-form hypothesis asserts that stock prices already reflect all publicly available information. The strong-form hypothesis asserts that stock prices reflect all relevant information including insider information.
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| Event study | Research methodology designed to measure the impact of an event of interest on stock returns.
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| Fundamental analysis | Research to predict stock value that focuses on such determinants as earnings and dividends prospects, expectations for future interest rates, and risk evaluation of the firm.
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| Index fund | A mutual fund holding shares in proportion to their representation in a market index such as the S&P 500.
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| Momentum effect | The tendency of poorly performing stocks and well-performing stocks in one period to continue that abnormal performance in following periods.
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| Neglected-firm effect | That investments in stock of less well-known firms have generated abnormal returns.
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| P/E effect | That portfolios of low P/E stocks have exhibited higher average risk-adjusted returns than high P/E stocks.
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| Passive investment strategy | See passive management.
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| Random walk | Describes the notion that stock price changes are random and unpredictable.
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| Resistance level | A price level above which it is supposedly difficult for a stock or stock index to rise.
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| Reversal effect | The tendency of poorly performing stocks and well-performing stocks in one period to experience reversals in following periods.
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| Semistrong-form EMH | See efficient market hypothesis.
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| Small-firm effect | That investments in stocks of small firms appear to have earned abnormal returns.
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| Strong-form EMH | See efficient market hypothesis.
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| Support level | A price level below which it is supposedly difficult for a stock or stock index to fall.
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| Technical analysis | Research to identify mispriced securities that focuses on recurrent and predictable stock price patterns and on proxies for buy or sell pressure in the market.
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| Weak-form EMH | See efficient market hypothesis.
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