Question: Question 9 The size effect suggests Fama-French 3 factor model is a wrong model Either market is likely inefficient or the CAPM model is not

Question 9

The size effect suggests

Fama-French 3 factor model is a wrong model

Either market is likely inefficient or the CAPM model is not right

Every small stock should outperform large stock in the long term

A portfolio of small stock should outperform a portfolio of large stock next year

According to the capital asset pricing model, a security with a _________.

zero alpha is a good buy

positive alpha is considered underpriced

positive alpha is considered overpriced

negative alpha is considered a good buy

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