A Hybrid Strategy Is One Where the Investor

question 24

Multiple Choice

A hybrid strategy is one where the investor

• A) uses both fundamental and technical analysis to select stocks.
• B) selects the stocks of companies that specialize in alternative fuels.
• C) selects some actively-managed mutual funds on their own and uses an investment advisor to select other actively-managed funds.
• D) maintains a passive core and augments the position with an actively-managed portfolio.

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Definitions:

Actor/Observer Bias

The tendency to attribute one's own actions to external causes while attributing others' actions to their personality.

Self-Fulfilling Prophecy

A situation where an individual's expectations or the expectations of others lead to behaviors that cause those expectations to come true.

Ingroup/Outgroup Bias

The tendency to favor members of one's own group (the ingroup) over those in other groups (the outgroup), often leading to prejudice and discrimination.

Self-Fulfilling Prophecy

A belief or expectation that influences behavior in a way that causes the belief to become true.