Investors Can Make Their Investments in Corporate Stocks Less Risky

question 168

Multiple Choice

Investors can make their investments in corporate stocks less risky by

• A) purchasing shares of a mutual fund, which holds the stocks of many diverse corporations.
• B) buying stocks and holding them each for only for short periods of time.
• C) investing in firms that are in the same, rather than different, industries.
• D) none of the above.

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Definitions:

Post Hoc, Ergo Propter Hoc

Literally, “after this (in time), therefore because of this.” A common error made in thinking about causation: If Event A happens before Event B, it is not necessarily true that A caused B.

Fallacy

A flawed argument that uses poor reasoning or misrepresents evidence, often leading to incorrect conclusions.

Inductive Reasoning

A reasoning method that involves generalizing from a set of specific observations to reach a broader conclusion.

Rent Control Laws

Regulations that limit the amount landlords can charge for leasing property to ensure affordable housing for tenants.