Which of the Following Is a (Are) Result(s) of the Fama

question 2

Multiple Choice

Which of the following is a (are) result(s) of the Fama and French (2002) study of the equity premium puzzle?I) Average realized returns during 1950-1999 exceeded the internal rate of return (IRR) for corporate investments.II) The statistical precision of average historical returns is far higher than the precision of estimates from the dividend-discount model (DDM) .III) The reward-to-variability ratio (Sharpe) derived from the DDM is far more stable than that derived from realized returns.IV) There is no difference between DDM estimates and actual returns with regard to IRR, statistical precision, or the Sharpe measure.

• A) I, II, and III
• B) I and III
• C) I and II
• D) II and III
• E) IV

---

Definitions:

Circuit Switching

Where a dedicated connection is formed between two points (such as two people on telephones) and the connection remains active for the duration of the transmission.

Dedicated Connection

A communication link reserved exclusively for the use of a specific service, user, or application, often guaranteeing constant bandwidth.

Transmission

Transmission refers to the process of transferring data or power from one place to another, often used in contexts like data transmission over networks or mechanical power transmission in machinery.

Domain Name System

The decentralized naming system for computers, services, or any resource connected to the Internet or a private network, translating human-friendly domain names to IP addresses.