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

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.9P

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