Studies of Liquidity Spreads in Security Markets Have Shown That

question 50

Multiple Choice

Studies of liquidity spreads in security markets have shown that

• A) liquid stocks earn higher returns than illiquid stocks.
• B) illiquid stocks earn higher returns than liquid stocks.
• C) both liquid and illiquid stocks earn the same returns.
• D) illiquid stocks are good investments for frequent,short-term traders.
• E) None of these are true.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.