The Value Effect Suggests That Investors Can Earn Abnormal Returns

question 20

Multiple Choice

The value effect suggests that investors can earn abnormal returns by holding stocks with:

• A) low price multiples.
• B) high price multiples.
• C) small size and strong recent performance.
• D) large size and strong recent performance.

---

Definitions:

Operationalize

The process of defining a concept in measurable terms, allowing it to be tested, measured, or used in data collection.

Quantifiable Measures

Variables or aspects of a situation that can be expressed numerically, allowing for measurement and comparison.

Methodological Challenges

Refers to difficulties encountered in the process of conducting research or analysis, often related to the design, implementation, and interpretation of studies.

Resilience

The capability of individuals, communities, or systems to recover quickly from difficulties or adapt to significant stress and change.