What Is the Simplest Answer That Explains the Most Evidence

question 18

Multiple Choice

What is the simplest answer that explains the most evidence

• A) principle of parsimony
• B) mental accessibility
• C) heuristics
• D) priming

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Definitions:

Well-diversified Portfolio

An investment portfolio strategically crafted to include a variety of asset classes in order to minimize risk.

Regression Coefficient

A quantitative measure in statistics that represents the strength and direction of the relationship between a dependent variable and an independent variable in a regression analysis.

Single Factor Model

A model that explains the returns of an asset or portfolio using a single risk factor.

SMB Beta

A measure used in finance to assess the sensitivity of a stock's return relative to the size factor in an asset pricing model.