Momentum in the stock market refers to a phenomenon that past winners continue outperforming while past losers continue underperforming in the future. Which of the followings is not a possible explanation for the momentum effect?
Group of answer choices
Investors tend to sell winners too quickly while being reluctant to sell losers
Momentum captures a part of the systematic risk of a stock
Investors slowly update their beliefs in response to new information
Investors extrapolate recent trends in stock return too far into the future