The Madness of Markets - Quiz

According to behavioral finance principles outlined in the source text, how should an investor adjust their trading strategy based on the lookback time horizon of past stock performance?

• A.Bet on reversal for short-term (6-month) returns and chase momentum for long-term (3-year) returns.
• B.Apply reversal strategies universally across all time horizons because markets immediately correct errors.
• C.Chase momentum for a 6-month lookback period, but bet on reversal for a 3-year lookback period.
• D.Apply momentum strategies universally across all time horizons because recent performance always continues.