During a Field Trip, an Instructor Touched a Moth Resting

question 66

Multiple Choice

During a field trip, an instructor touched a moth resting on a tree trunk. The moth raised its forewings to reveal large eyespots on its hind wings. The instructor asked why the moth lifted its wings. One student answered that sensory receptors had fired and triggered a neuronal reflex culminating in the contraction of certain muscles. A second student responded that the behavior might frighten predators. Which statement best describes these explanations?

• A) The first explanation is correct, but the second is incorrect.
• B) The first explanation refers to proximate causation, whereas the second refers to ultimate causation.
• C) The first explanation is testable as a scientific hypothesis, whereas the second is not.
• D) Both explanations are reasonable and simply represent a difference of opinion.

---

Definitions:

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment portfolio, by comparing its excess returns to the volatility of those returns.

Active Portfolio Managers

Investment professionals who make regular buy, hold, and sell decisions in an attempt to outperform standard benchmarks.

Active Portfolio

An investment portfolio actively managed by a portfolio manager or investor aiming to outperform a benchmark index through regular buying and selling of securities.

Systematic Risk

This refers to the inherent risk that affects the entire financial market or a whole market segment, unpreventable through diversification.