Information content effect

Information content effect,

Definition of Information content effect:

  1. The amount of information contained in something.

  2. The increase or decrease in the price of a security as a result of new relevant information. An instance of this effect occurs when a stock rises in price after a positive earnings report is released. Conversely, a stock price may also fall after news report surface of unfavorable activities by company executives. A strategy to reduce the effects of company content would entail the buildup of expectations prior to any official announcements are made.

Meaning of Information content effect & Information content effect Definition