In the context of the BSV model, explain intuitively (non technically) why two consecutive earnings changes in

Question:

In the context of the BSV model, explain intuitively (non technically) why two consecutive earnings changes in the same direction make investors less likely to think that they are in regime 1 (mean-reversion) vs. the case of two earnings changes in alternate directions.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Question Posted: