Case Study: Dimensional Fund Advisors, 2002

Suggested Assignment Questions: 1. What are the conclusive beliefs of Dimension Investment Advisors (DFA)?  What kind of products does DFA propose? How does DFA add rate for its investors? 2. How is DFA’s trade type cognate to the inquiry of FAMA and French?  Why do you conceive small-cap stocks outperformed large-cap stocks historically?  That is, do the ameliorate income of  small-cap stocks advert the wages for extra lavish or the chastisement in mispricing?  In other words, do you conceive small-cap stocks are lavishier than large-cap stocks?  Or small-cap stocks are undervalued not-absolute to large-cap stocks and such mispricing is corrected as term elapses? Do you rely-on this precedent to hold? 3. Similarly, why do you conceive rate stocks outperformed enlargement stocks historically? That is, do The ameliorate income of rate stocks advert lavish wages or corrected mispricing?  Do you Expect this precedent to hold?   4. Why does DFA prevention so fur encircling trading?  What rules does the established graft for its trading practice?  Do you conceive DFA can conduct its competitive custom in trading in the coming? 5. How does DFA’s new tax-management trade fruit?  What are the costs and the benefits?  Is the tax-managed investment trade mitigated to be auspicious on a liberal flake? 6. How should DFA train its policy going self-assertive?  To hold its victory, do you conceive DFA should compel any changes?  If so, can you insinuate any directions?  If not, why?