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Which of the Following Statements Is (Are) True Regarding Time

question 14

Multiple Choice

Which of the following statements is (are) true regarding time diversification?
I. The standard deviation of the average annual rate of return over several years will be smaller than the 1-year standard deviation.
II. For a longer time horizon, uncertainty compounds over a greater number of years.
III. Time diversification does not reduce risk.


Definitions:

Decentration

In Piagetian theory, the ability to consider multiple aspects of a situation rather than focusing on a single perspective.

Reversal

The act of changing something to its opposite direction, state, or position.

Imaginary Friends

Fictional characters created by children for companionship, often seen as a normal aspect of child development.

Peer Relationships

Social connections among individuals of approximately the same age, which are important for social development.

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