Many stock analysts assume that a mispriced stock will

A) immediately return to its intrinsic value.
B) return to its intrinsic value within a few days.
C) never return to its intrinsic value.
D) gradually approach its intrinsic value over several years.
E) None of the options are correct.

Question

Zybrea Knight · Accepted Answer

Final Answer : D, Explanation :  Stock prices tend to gradually adjust to their intrinsic values over time due to market participants reacting to new information and adjusting their valuations accordingly. This process is not immediate but unfolds over months or years as perceptions and realities align.

Many stock analysts assume that a mispriced stock will

A) immediately return to its intrinsic value.
B) return to its intrinsic value within a few days.
C) never return to its intrinsic value.
D) gradually approach its intrinsic value over several years.
E) None of the options are correct.

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Learning Objectives

Learning Objectives

Related questions

Many stock analysts assume that a mispriced stock willA) immediately return to its intrinsic value.B) return to its intrinsic value within a few days.C) never return to its intrinsic value.D) gradually approach its intrinsic value over several years.E) None of the options are correct.

Definitions

Learning Objectives

Learning Objectives

Related questions

Many stock analysts assume that a mispriced stock will

A) immediately return to its intrinsic value.
B) return to its intrinsic value within a few days.
C) never return to its intrinsic value.
D) gradually approach its intrinsic value over several years.
E) None of the options are correct.