The hypothesis that argues that there is a downward price pressure at the end of the tax year on shares that have experienced recent price declines as investors attempt to sell in order to realise capital losses is the:

A) tax-loss selling hypothesis
B) tax on capital gains hypothesis
C) price rebound hypothesis
D) share price declines hypothesis

Question

The hypothesis that argues that there is a downward price pressure at the end of the tax year on shares that have experienced recent price declines as investors attempt to sell in order to realise capital losses is the:

A) tax-loss selling hypothesis
B) tax on capital gains hypothesis
C) price rebound hypothesis
D) share price declines hypothesis

Quizplus · Accepted Answer

The tax-loss selling hypothesis has been put forward as an explanation of the seasonality in the size premium in the USA and extended to other monthly seasonal in other markets,such as July in Australia.The hypothesis that argues that there is a downward price pressure at the end of the tax year on shares that have experienced recent price declines as investors attempt to sell in order to realize the capital loss.

The Hypothesis That Argues That There Is a Downward Price