Historically, Small-Firm Stocks Have Earned Higher Returns Than Large-Firm Stocks

question 22

Multiple Choice

Historically, small-firm stocks have earned higher returns than large-firm stocks. When viewed in the context of an efficient market, this suggests that ________.

• A) small firms are better run than large firms
• B) government subsidies available to small firms produce effects that are discernible in stock market statistics
• C) small firms are riskier than large firms
• D) small firms are not being accurately represented in the data

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Definitions:

Share Account

An account in a credit union that represents ownership in the cooperative, allowing the holder to deposit and withdraw funds.