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As She Walked Through Her Neighborhood, Posie, a 6-Year-Old Girl

question 88

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As she walked through her neighborhood, Posie, a 6-year-old girl, frequently saw a large brown dog. She repeatedly walked to the dog to pet it, but as her hand approached the animal, it barked and bit her. The bite was painful and caused her to cry. Posie now cries when she sees any dog-big or small, brown or black, etc. This illustrates which of the following concepts?


Definitions:

Stock Market

A public market for the trading of company stocks and other securities, often considered a reflection of the economic strength of a country.

New Stock Issue

The release of additional shares by a company to the public for the purpose of raising capital.

Expansion

The phase of the business cycle where economic activities and production levels increase, leading to growth in GDP and employment.

Indexed Equity Mutual Fund

An equity mutual fund that holds a portfolio of stocks that matches their share (or weight) in a broad stock market index such as the S&P 500. The overhead of these funds is usually quite low because their expenses on stock trading and research are low.

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