The results of return prediction studies have found
A) Limited success predicting short-horizon returns.
B) Limited success predicting long-horizon returns.
C) Good success predicting long-horizon returns.
D) Choices a and b.
E) Choices a and c.

Question

Quizplus · Accepted Answer

Studies on return prediction have generally found limited success in predicting short-horizon returns due to market efficiency and noise trading, but better success in predicting long-horizon returns, where factors such as valuation ratios can provide more reliable signals.

The Results of Return Prediction Studies Have Found