Which of the following are offered as possible causes of the January effect?
I. new professional money managers who assume the role at the beginning of the year
II. tax loss selling in December
III. bonus lock-in effect
IV. window dressing
A)I and II only
B)III and IV only
C)I, III, and IV only
D)II, III, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

The January effect is often attributed to tax loss selling in December, where investors sell off losing stocks to claim capital losses for tax purposes, and window dressing, where fund managers sell underperforming stocks before year-end to improve portfolio appearance. The bonus lock-in effect is also considered, as investors may sell stocks after receiving year-end bonuses.

Which of the Following Are Offered as Possible Causes of the January