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Question
Which is most accurate concerning the behavior of a stock’s return after a stock split relative to companies whose stock has not split?
a) Compared to companies whose stock has not recently split, the stock prices of companies whose stock has recently split are less sensitive to improvements in performance.
b) Compared to companies whose stock has not recently split, the stock prices of companies whose stock has recently split are significantly more sensitive to improvements in performance.
c) Compared to companies whose stock has not recently split, the stock prices of companies whose stock has recently split are about equally sensitive to improvements in performance.
d) Compared to companies whose stock has not recently split, the stock prices of companies whose stock has recently split are more sensitive to improvements in performance, but the difference is not significant.
Answer
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