Research by Jeremy Stein of MIT Resolves the Dispute Over

question 162

Multiple Choice

Research by Jeremy Stein of MIT resolves the dispute over whether beta is a sufficient pricing factor by suggesting that managers should use beta to estimate

• A)long-term returns but not short-term returns.
• B)short-term returns but not long-term returns.
• C)both long- and short-term returns.
• D)book-to-market ratios.
• E)None of the above was suggested by Stein.

---

Definitions:

Empirical Evidence

Evidence that is based on observation or experience as opposed to theoretical or logical derivation.

Extended Argument

A complex form of reasoning that unfolds over a series of statements or propositions, each supporting the overall conclusion.

Implicit Conclusions

Conclusions not directly stated but inferred from the provided premises or evidence.

Syllogisms

Logical arguments containing three parts: a major premise, a minor premise, and a conclusion, used to derive a truth from assumed truths.