01623nas a2200169   4500008004100000245008100041210006900122260000900191300001200200490000700212520104800219653001201267100002401279700001701303700002001320856011301340       2005                        eng d00aThe Effects of Market Inefficiencies on Trading Strategies for Country Funds0 aEffects of Market Inefficiencies on Trading Strategies for Count  c2005  a2964-840 v163 aEconomists disagree about how sensitive country fund prices are to U.S. market returns. We provide additional evidence on this issue through an examination of daily fund discounts. Fund shares provide significant average returns in the three days following large positive and negative discount changes. This finding suggests that large short-term changes in the relation between price and underlying value are not quickly mitigated in the market for country fund shares. Following large negative discount changes, the returns on fund shares and NAVs are of greater magnitude when the S&P 500 Index declines by more than 1%. This is consistent with negative changes in U.S. market sentiment affecting both country fund prices and NAVs in the short-term. Simple trading strategies that take advantage of large discount changes around big changes in the U.S. market appear generally profitable even after adjusting for transaction costs. The limited liquidity in country fund shares suggests that it may be difficult to implement such strategies.10aFinance1 aHughen, Christopher1 aMathew, Prem1 aRagan, Kent, P.  uhttps://dev.business.oregonstate.edu/biblio/effects-market-inefficiencies-trading-strategies-country-funds-0