Studies of the Small-Firm Effect Indicate There May Be Superior

Studies of the small-firm effect indicate there may be superior return potential in investing in smaller-capitalization firms because:

A) The high P/E ratios of many of these firms eventually lead to superior returns
B) Smaller firms have less expenses,therefore,making more money for their investors
C) There is less efficiency in this segment of the market due to minimal institutional participation
D) Smaller firms are always growing,along with the returns that their investors receive