The Variation in the Rate of Return One Can Expect

question 222

Multiple Choice

The variation in the rate of return one can expect from ownership of stocks will generally be smaller if

• A) all of the funds are invested in a specific sector of the economy such as the automobile industry.
• B) a diverse set of stocks is held over a lengthy period of time such as 30 or 40 years.
• C) all of the funds are invested in a single stock.
• D) the funds are invested for a relatively short period of time.

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Definitions:

Mischel

A psychologist known for his work on personality theory and cognitive-affective systems, suggesting that behavior is influenced more by situational factors than by innate traits.

Nomothetic Goals

Refers to the objectives or aims that can be applied universally, emphasizing general laws and traits that can be studied across individuals.

Achievement

Accomplishment or success obtained by effort or skill.