Which of the Following Is a Risk That Investors Undertake

question 233

Multiple Choice

Which of the following is a risk that investors undertake when purchasing stocks?

• A) An individual stock can rise and fall unpredictably.
• B) Nearly all stocks in the stock market may rise or fall together, when expectations about the entire economy change.
• C) Both a and b are true.
• D) Neither a nor b is true.

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Definitions:

Defense Mechanism

Psychological strategies brought into play by individuals, groups, and even nations to cope with realities and to maintain self-image.

Displacement

A defense mechanism where an individual redirects emotional impulses from a real object to a substitute target.

Repression

A defense mechanism where unpleasant thoughts, feelings, or desires are unconsciously excluded from consciousness.

Psychodynamic Tradition

A psychological perspective that emphasizes unconscious processes and childhood experiences in shaping behavior and personality.