Which of the Following Is NOT True Regarding Individual Investor

question 69

Multiple Choice

Which of the following is NOT true regarding individual investor behavior?

• A)Individual investors fail to diversify their portfolios adequately.
• B)A vast majority of individual investors hold fewer than 10 stocks in their portfolio.
• C)Employees tend to overinvest in their company's own stock.
• D)Individual investors' portfolios consistently outperform the market averages.

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Definitions:

EAR

Effective Annual Rate (EAR) is a measure of interest that takes into account the effects of compounding over a given period.

Compounded Monthly

Interest calculated on an investment or loan each month based on both the initial principal and the accumulated interest from previous months.

EAR

Effective Annual Rate, a measure of interest that takes into account the effect of compounding over a year.

Compounded Quarterly

The process whereby the interest earned on an investment is calculated and added to the principal sum every three months, then the new total is used for the next compounding period.