Fama and MacBeth (1973)found That the Relationship Between Average Excess

question 15

Multiple Choice

Fama and MacBeth (1973) found that the relationship between average excess returns and betas was _______.

• A)linear
• B)nonexistent
• C)as expected, based on earlier studies
• D)Fama and MacBeth did not examine the relationship between excess returns and beta
• E)A and C

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, including voting rights and a share of profits through dividends.

Account Payable

An obligation or liability of a company to pay a debt owed to a creditor or supplier for goods and services received.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on a part of the corporation's profits.

Current Ratio

An indicator of a company's capability to cover its short-term liabilities with assets that can be quickly converted to cash.