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.

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Definitions:

Diffusion Of Responsibility

is a sociopsychological phenomenon whereby a person is less likely to take responsibility for action or inaction when others are present.

Therapeutic Community

A structured environment where individuals support one another in recovery or rehabilitation, using the community itself as a key agent of change.

Core Concept

A fundamental idea or principle that serves as the foundation for a system, theory, or belief.

Bystander Effect

A social psychological phenomenon where individuals are less likely to offer help to a victim when other people are present, often due to a diffusion of responsibility.