According to the False Consensus Effect, Most People ____

question 180

Multiple Choice

According to the false consensus effect, most people ____.

• A)overestimate the proportion of people who would respond the same way as them in a situation
• B)hide the way they truly feel about an issue in order to reach a consensus
• C)lean toward the most popular opinion of a group regardless of how they feel
• D)assume that they will be in the minority because they are nonconformist

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Definitions:

Capital Market Line

A line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk-free rate of return and the level of risk (standard deviation) for a particular portfolio.

Forecasted Return

The predicted financial return of an investment over a specific period, often based on historical data, current trends, and professional analysis.

Required Return

The minimum return that an investor expects to achieve on an investment to consider it a worthwhile risk.

Standard Deviation

A measure of the dispersion or variability in a set of values, often used to gauge the risk associated with a particular investment or portfolio.