Which of the Statements Below Is NOT Correct

question 57

Multiple Choice

Which of the statements below is NOT correct?

• A)If two investments have the same expected return,the investment with the lower risk is preferred.
• B)If two investments have the same expected return,the investment with the greater risk is preferred.
• C)If two investments have the same expected risk,the investment with the higher expected return is preferred.
• D)If one investment has a higher expected return and a greater level of risk than another,it is not clear which investment is the preferred choice.

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Definitions:

Elaboration Likelihood

A theory in social psychology that explains different ways of processing stimuli, why they are used, and their outcomes on attitude change.

Heuristic-Systematic

A model describing two distinct ways people process information: through heuristic cues or systematic analysis.

Boomerang

A curved piece of wood or other material that, when thrown, returns to the thrower. Metaphorically, it can imply actions that backfire on the initiator.

Psychological Reactance

The unpleasant emotional response people experience when someone is trying to restrict their freedom to engage in a desired behavior.