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Financial Market Anomalies
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What is the term for the tendency of investors to overreact to new information, leading to excessive price movements?
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A
Overreaction
💡 Explanation:
Overreaction refers to the phenomenon where investors react too strongly to new information, causing prices to move excessively in one direction. This can lead to market inefficiencies and opportunities for investors who can identify and capitalize on these overreactions.