You Have Been Set Up on a Blind Date, and You

question 159

Multiple Choice

You have been set up on a blind date, and you find out that the date is with an investment banker.Suppose that you hold the stereotype that investment bankers are aggressive, rude, self-serving, and chauvinistic.If you are like MOST people, you will spend the evening

• A)assuming that the date is aggressive, rude, self-serving, and chauvinistic, without ever looking for evidence one way or the other
• B)hoping that the date will be aggressive, rude, self-serving, and chauvinistic
• C)testing the hypothesis that the date is aggressive, rude, self-serving, and chauvinistic
• D)thinking about how much you detest people who are aggressive, rude, self-serving, and chauvinistic

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Definitions:

Abnormal Price Change

A significant variation in the price of a security or trading instrument that cannot be explained by market fundamentals and might be attributed to extenuating circumstances or events.

Selection Bias

Selection bias is a distortion in statistical analysis resulting from the method of collecting samples, potentially causing results to not be representative of the wider population.

Market Efficiency

The degree to which market prices fully reflect all available information and expectations, enabling securities to be priced appropriately.

Black Monday

Refers to a specific date, October 19, 1987, when stock markets around the world crashed, recording the largest one-day percentage decline in stock market history.