Based on the period 1926-2013, value stocks have:
A) had low ratios of book value to market value.
B) performed exactly as predicted by CAPM.
C) provided a higher long-run return than growth stocks.
D)consistently underperformed.

Question

Quizplus · Accepted Answer

According to various studies, value stocks have provided a higher long-run return than growth stocks based on the period 1926-2013. Therefore, option C is the correct choice. The other choices are not accurate as value stocks may have a high book value to market value ratio, CAPM cannot predict stock performance accurately, and value stocks have not consistently underperformed.

Based on the Period 1926-2013, Value Stocks Have