Which of the Following Statements Is True About Theories in Personality

question 57

Multiple Choice

Which of the following statements is true about theories in personality psychology?

• A) A good theory generates testable hypotheses.
• B) A theory proves the relationship between constructs or events.
• C) The best theory is the one that explains a phenomenon with a large number of constructs.
• D) There is no way to statistically validate a theory, so theories are accepted or rejected based on opinion.

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Definitions:

Volatility

Volatility is a statistical measure of the dispersion of returns for a given security or market index, indicating the degree of variation from the average over a certain period.

CAPM

The Capital Asset Pricing Model is a formula used to determine the expected return on an investment, factoring in its risk compared to the market.

Required Return

The smallest yearly percentage gain from an investment necessary to entice people or corporations to invest in a certain security or endeavor.

Risk Aversion

The tendency of investors to prefer lower risk or safer investments to avoid potential losses.