The small firm in January effect is strongest ________.
A) early in the month
B) in the middle of the month
C) late in the month
D) in even numbered years

Question

Quizplus · Accepted Answer

The small firm in January effect is strongest early in the month. This is because small firms have less market liquidity and investors tend to sell their holdings in these firms at the end of the year to realize losses for tax purposes. This creates a buying opportunity for investors in January, particularly in the first two weeks of the month.

The Small Firm in January Effect Is Strongest ________