In Their 2010 Study, Fama and French Used a Four-Factor

question 10

Multiple Choice

In their 2010 study, Fama and French used a four-factor model to analyze excess returns on equity mutual funds. They found that the funds ________.

• A) had negative alphas before fees were considered
• B) had positive alphas after fees were considered
• C) had negative alphas after fees were considered
• D) had negative alphas before fees were considered and had negative alphas after fees were considered

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Definitions:

Facial Feedback Hypothesis

The idea that facial movements can influence emotional experiences.

Discrete Emotional State

A specific, identifiable emotional condition experienced by an individual, distinguished from other emotions by clear boundaries.

Facial Expressions

Visible changes in the face that convey emotional states or reactions, often universally recognized emotions such as happiness, anger, or surprise.

Self-Awareness Theory

The theory that aspects of the self—one’s attitudes, values, and goals—will be most likely to influence behavior when attention is focused on the self.