Which of the Following Theories Explains the Insufficient Justification Effect

question 84

Multiple Choice

Which of the following theories explains the insufficient justification effect by claiming that we explain our behavior by noting the conditions under which it occurs?

• A)self-perception theory
• B)self-presentation theory
• C)role-playing theory
• D)cognitive dissonance theory

Understand the differences in risk tolerance among investors and its impact on portfolio selection.

Recognize the importance of the risk-free asset in portfolio construction and its role.

Understand and apply the concept of the reward-to-volatility ratio.

Comprehend the principles of asset allocation between risky and risk-free assets.

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Definitions:

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract, regarding their rights and responsibilities.

Assertion

A confident and forceful statement of fact or belief, commonly used in argument or discourse.

Duress

A situation where a person performs an act as a result of violence, threat, or other pressures against them.

Coercion

The act of compelling a party to act in an involuntary manner by use of threats or force.