Which of the following statement(s) on return predictability are correct: 1. Present value relationship suggests that high dividend price ratio must be followed by high dividend growth or high expected returns or some combination of both 2. Return predictability is inconsistent with efficient markets 3. Existing studies suggest that there is some evidence for mean reversion in stock returns over longer horizons. 4. The Stambaugh bias will be larger for a more persistent predictor. O 2,3,4 O 3,4 O 1,3,4 1.3

Which of the following statement(s) on return predictability are correct: 1. Present value relationship suggests that high dividend price ratio must be followed by high dividend growth or high expected returns or some combination of both 2. Return predictability is inconsistent with efficient markets 3. Existing studies suggest that there is some evidence for mean reversion in stock returns over longer horizons. 4. The Stambaugh bias will be larger for a more persistent predictor. O 2,3,4 O 3,4 O 1,3,4 1.3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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