If one firm in a given industry declares bankruptcy, the market may lo
If one firm in a given industry declares bankruptcy, the market may lower the values of other firms in a given industry because the reveals new, negative information about the status of the industry as a whole. This phenomenon is called:
a. the contagion effect.
b. the intra-industry wealth transfer effect.
c. irrational behavior.
d. the sympathy effect.
ANSWER
A
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