The Better-Than-Average Effect Refers to the Finding That People

question 35

Multiple Choice

The better-than-average effect refers to the finding that people

• A) tend to assume others are better than they themselves at difficult tasks.
• B) tend to think that they are above average.
• C) who are better than average are happier.
• D) who are better than average are actually more modest about their abilities.

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Definitions:

Capital Gains Yield

The price appreciation component of a stock's total return, calculated as the increase in the stock price divided by its initial price.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Financing Costs

Financing costs are expenses incurred by an entity in the process of borrowing funds, including interest payments and other related fees.