Fama and French Examined the Relationship Between the Book Value

question 20

Multiple Choice

Fama and French examined the relationship between the Book Value to Market Value ratio and average stock returns and found

• A) No evidence of a relationship for Canadian stocks.
• B) Evidence of a negative relationship in Canadian stocks only.
• C) Evidence of a positive relationship for Japanese stocks only.
• D) Evidence of a negative relationship for Canadian and Japanese stocks.
• E) Evidence of a positive relationship for U.S. and Japanese stocks.

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Definitions:

Visual Receptors

Cells located in the retina of the eye that are sensitive to light and enable vision.

Color Vision

The ability of the visual system to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Cones

Photoreceptor cells in the retina of the eye that function best in relatively bright light and enable the perception of color.

Dim Light

A low level of illumination, often creating a subdued or intimate atmosphere.