Fama and French (1992) Found That the Stocks of Firms

question 45

Multiple Choice

Fama and French (1992) found that the stocks of firms within the highest decile of book-to-market ratios had an average annual return of _______, while the stocks of firms within the lowest decile of book-to-market ratios had an average annual return of ________.

• A) 15.6%; 13.1%
• B) 17.2%; 11.1%
• C) 13.2%; 16.4%
• D) 11.1%; 17.2%

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Definitions:

Reworked Cost

The expenses associated with correcting defective products or redoing a production process to meet quality standards after the initial manufacturing effort.

Financial Advantage

A benefit in economic terms that positions an entity in a more favorable financial situation than others.

Surplus Material

Excess materials that are not required for current production needs and may be sold or reused in future projects.

Purchased Lots

Refers to parcels or quantities of goods acquired by a company, often used in reference to real estate or bulk purchases of inventory.