Which of the Following Is True Regarding the Size Anomaly

question 56

Multiple Choice

Which of the following is true regarding the size anomaly?

• A)As much as 50% of small cap outperformance is associated with the January effect.
• B)Small cap stocks underperform large cap stocks in recent years.
• C)Small cap stock outperformance is a NASDAQ phenomenon,not NYSE.
• D)Small cap stock outperformance is unaffected by micro-cap,commission,or liquidity (i.e.,bid-ask spread)concerns.

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Definitions:

Illusory Correlations

The phenomenon when people falsely perceive an association between two events or situations, primarily due to cognitive biases or statistical artifacts.

Independent Variables

Variables in an experiment that are manipulated by the researcher to test their effect on dependent variables.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together.

Correlation Coefficient

A statistical index measuring the strength and direction of a linear relationship between two variables.