Which of the Following Statements Is FALSE

question 85

Multiple Choice

Which of the following statements is FALSE?

• A) The geometric average return is a better description of the long-run historical performance of an investment.
• B) We should use the arithmetic average return when we are trying to estimate an investment's expected return over a future horizon based on its past performance.
• C) The geometric average return will always be above the arithmetic average return, and the difference grows with the volatility of the annual returns.
• D) The compounded geometric average return is most often used for comparative purposes.

---

Definitions:

Stigmatizing Effect

The negative impact that occurs when individuals are labelled by society, leading to experiences of discrimination and exclusion.

Vodou Priestess

A female spiritual leader in the Vodou religion, responsible for guiding rituals, ceremonies, and communicating with spirits.

Preconceived Notions

Ideas or opinions formed in advance without adequate evidence or experience, leading to biases or misjudgments.

Passing

The ability of an individual to be regarded as a member of an identity group or category different from their own, which can include racial identity, gender, or social class.