Jagannathan and Wang (2006)find That the CCAPM Explains Returns ______

question 49

Multiple Choice

Jagannathan and Wang (2006) find that the CCAPM explains returns ______ the Fama-French 3-factor model and that the Fama-French 3-factor model explains returns ______ the traditional CAPM.

• A)worse than; worse than
• B)worse than; better than
• C)better than; better than
• D)better than; worse than
• E)equally as well as; equally as well as

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Definitions:

Null Hypothesis

A statement used in statistics that proposes there is no effect or no difference, and it is the hypothesis that researchers aim to test against.

Probability

A measure of the likelihood that an event will occur, quantified as a number between 0 and 1.

Null Hypothesis

An assumption in hypothesis testing that there is no significant difference or effect.

.05

Often signifies the alpha level used in hypothesis testing that represents a 5% risk of concluding that a difference exists when there is no actual difference.