Answer to Question #65747 in Finance for Abdul

Question

Explain the factors that complicate the valuation of Securities

Answer 1

- Value factor: stocks with a low price to book earn higher returns than stocks with a high price to book.
- Size factor: small-cap stocks on average outperform large-cap stocks.
- Profitability factor: stocks with high operating profitability show better performance.
- Investment factors: high total assets growth associated with greater than average return.