The Habit System Adapts Slowly to Changes in Contingencies

question 39

True/False

The habit system adapts slowly to changes in contingencies.

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Definitions:

Treasury Note

A Treasury note is a marketable U.S. government debt security with a fixed interest rate and maturity between one and ten years.

Bid Price

The highest price that a buyer is willing to pay for a security or commodity.

Value-Weighted Index

An index in which each component is included in proportion to its market value, making larger companies account for a bigger portion of the index.

Divisor

A mathematical component used in indices to adjust the index value, catering for changes in stock splits or similar adjustments.