You Have Observed That the Forecasts of an Investment Advisor

question 10

Multiple Choice

You have observed that the forecasts of an investment advisor consistently outperform the other reported forecasts. The efficient markets hypothesis says that future forecasts by this advisor

• A)may or may not be better than the other forecasts. Past performance is no guarantee of the future.
• B)will always be the best of the group.
• C)will definitely be worse in the future. What goes up must come down.
• D)will be worse in the near future,but improve over time.

---

Definitions:

Framing

The process of presenting or structuring information and issues in a particular way to influence interpretation or decision making.

Credibility

The quality or attribute of being believable or worthy of trust based on one's reliability, expertise, and honesty.

Trustworthiness

The ability to be relied on as honest or truthful.

Inoculation Theory

A psychological theory suggesting that exposure to weakened forms of an argument increases later resistance to that argument, similar to how exposure to a virus can create immunity.