CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

Which of the following are criticisms of the small firm effect (size effect)?

I. The beta on small firms is underestimated.
II. The research only included NYSE firms.
III. Firms with low P/E ratios also outperformed the market.
IV. Transaction costs will eliminate all profits.
Correct Answer: I, II, III and IV

All of the above are criticisms.

User Contributed Comments 3

User Comment
johntan1979 Which research is II referring to?
khalifa92 the one published 1981.
zriddle Banz 1981
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