You have just completed a study of small and large stocks and have obtained the following results:
s$\begin{array} { l c c }
& \text { small stocks } & \text { large stocks } \
\text { excess returns } & 5 \% & 0 \% \
\text { transactions cost } & 10 \% & 2 \%
\end{array}$

Given the difference in transactions costs,how long would your investment horizon have to be for small stocks to be a better investment than large stocks?

Question

You have just completed a study of small and large stocks and have obtained the following results:
s$\begin{array} { l c c } 
& \text { small stocks } & \text { large stocks } \
\text { excess returns } & 5 \% & 0 \% \
\text { transactions cost } & 10 \% & 2 \%
\end{array}$

Given the difference in transactions costs,how long would your investment horizon have to be for small stocks to be a better investment than large stocks?

Quizplus · Accepted Answer

The Answer of You have just completed a study of small and large stocks and have obtained the following results:
s$\begin{array} { l c c } 
& \text { small stocks } & \text { large stocks } \
\text { excess returns } & 5 \% & 0 \% \
\text { transactions cost } & 10 \% & 2 \%
\end{array}$

Given the difference in transactions costs,how long would your investment horizon have to be for small stocks to be a better investment than large stocks?

You Have Just Completed a Study of Small and Large