$3$

Multiple Choice $0\mathrm{.}2$ points

Industry A is characterized by few players and it takes substantial investment and capital to enter the industry. Industry B is characterized by numerous firms that compete fiercely on price. Industry C is characterized by GAAP rules that restrict the firms to follow conservative accounting for its primary financial statement items. Which of the following is likely?

a$.$ ROE of firms in industry A are mostly likely mean reverting

d$.$ ROE of firms in industry A and $C$ are mostly likely mean reverting

b$.$ ROE of firms in industry $B$ are mostly likely mean reverting

c$.$ ROE of firms in industry C are mostly likely mean reverting