Work by Amihud and Mendelson (1986,1991)
A)argues that investors will demand a rate of return premium to invest in less liquid stocks.
B)may help explain the small firm effect.
C)may be related to the neglected firm effect.
D)B and C.
E)A,B,and C.

Question

Work by Amihud and Mendelson (1986,1991) 
A)argues that investors will demand a rate of return premium to invest in less liquid stocks.
B)may help explain the small firm effect.
C)may be related to the neglected firm effect.
D)B and C.
E)A,B,and C.

Quizplus · Accepted Answer

Amihud and Mendelson's work argues that investors will demand a rate of return premium to invest in less liquid stocks, which may help explain the small firm effect and may be related to the neglected firm effect. Therefore, all three choices (A, B, and C) are correct.