Earn average abnormal returns

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After combing through the data, you have noticed that firms hiring Fisher graduates earn average abnormal returns of +3% per year over the next few years. You are convinced that this is a genuine profit opportunity and so have decided to trade on it. You have $10,000 to invest and two options: (1) invest all $10,000 in one company that has just hired a Fisher graduate; (2) invest $1,000 in each of ten companies that have just hired Fisher graduates. Which choice is preferable, or does it not matter?

Reference no: EM131058328

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