Unformatted text preview: a) What are the characteristics of value stocks and growth stocks? Explain by referring to book-to-market ratio, price-to-earnings ratio and dividend payout ratio (6 points) b) Explain the Value-Growth Anomaly. Use the regression output below to clarify your answer (8 points) Resumen Estadísticas de la regresión Coeficiente de determinación R^2 0.0535 R^2 ajustado 0.0509 Error típico 2.48 Observaciones 355 Coeficientes Error típico Estadístico t Probabilidad Intercepción 0.2901 0.1362 2.1300 0.0339 S&P 500-0.1333 0.0298-4.4690 0.0000 c) Imagine an investor is confident that growth stocks will outperform value stocks in the next two years. Give two methods the investor could use to exploit the expected difference in performance (2 points)...
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This note was uploaded on 11/06/2011 for the course ECONOMICS ebc2034 taught by Professor Vaartjes during the Spring '11 term at Maastricht.
- Spring '11