Assignment: Evaluating Major Anomalies
Unit 2 Assignment: Evaluating Major Anomalies
Overview:During the first week’s assignment, you evaluated the role that the EMH and CAPM play in assumptions that are made by investors in the market. This week built upon those assumptions and introduced the concept of behavioral finance – a concept born due to the inability of modern finance to address uncertainty and tests of the concept of market efficiency.Instructions:Evaluate the major anomalies discussed such as the lagged reactions to earnings announcements, small-firm effect, the value advantage, along with both momentum and reversal. To complete this week’s assignment, write a 2-3 page essay that explains the potential effects of each of these. Include in your essay an explanation of theimportance of establishing a field such as behavioral finance.
Requirements:• 2-3 pages in length (double-spaced).• Additional title and reference pages included.• Proper grammar and APA formatting must be followed.• See grading criteria on the following page.
Be sure to read the criteria by which your work will be evaluated before you write and again after you write