Debont and Thayler (1985)'s overreaction hypothesis tends to:
A)support the weak form of the EMH.
B)not support the weak form of the EMH.
C)support the semistrong form of the EMH.
D)not support the semistrong form of the EMH.

Question

Quizplus · Accepted Answer

Debont and Thayler's overreaction hypothesis suggests that investors tend to overreact to news and information, leading to temporary mispricings in the market. This does not support the weak form of the EMH, which states that past prices and returns cannot be used to predict future prices and returns, as it implies that there are deviations from the efficient market due to overreaction to news and information.

Debont and Thayler (1985)'s Overreaction Hypothesis Tends To