What Is the Advantage of a Simulation Compared to a Traditional

question 15

Multiple Choice

What is the advantage of a simulation compared to a traditional laboratory study?

• A)​increased internal validity
• B)​increased external validity
• C)increased reliability
• D)​elimination of history effects

Analyze the impact of investment decisions and biases on fund performance.

Compute and interpret the returns from various investment strategies.

Appreciate the importance of risk adjustment in measuring mutual fund performance.

Identify the biases and challenges in measuring and comparing mutual fund performances.

---

Definitions:

Preferred Stock

A type of stock that typically pays fixed dividends and has priority over common stock in the event of a liquidation.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to a share of the company’s assets and profits.

Dividends

Periodic payments made to shareholders, reflecting a portion of a company's profit.

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, often receiving dividends before common shareholders.