Which of the Following Best Describes the So-Called Size Effect

question 37

Multiple Choice

Which of the following best describes the so-called size effect?

• A) On average, small cap stocks return more than large cap stocks.
• B) On average, large cap stocks return more than small cap stocks.
• C) On average, small cap stocks earn abnormal returns.
• D) Small cap stocks tend to perform exceptionally well during bull markets.

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Definitions:

U.S. Supreme Court

The U.S. Supreme Court is the highest court in the United States, holding ultimate appellate jurisdiction over all federal and state court cases that involve a point of federal law.

Fourth Branch of Government

Informally refers to groups that influence the three branches of government defined in the U.S. Constitution (executive, legislative, and judicial) such as the media, the people, or administrative agencies.

Formal Rule Making

A procedure in administrative law where agencies establish new regulations through a process that involves publication of proposed rules, public commenting, and final rule issuance.

Notice-and-Comment Rule Making

A procedure required by law in the United States for federal agencies to give the public notice of a proposed regulation and the opportunity to submit comments.