If You, as a Farmer, Have a Bumper Crop This

question 110

Multiple Choice

If you, as a farmer, have a bumper crop this year you will make more money.If all farmers have a bumper crop this year, all farmers will make more money.What kind of fallacy does this statement exhibit?

• A)post hoc fallacy.
• B)failure to hold other things constant fallacy.
• C)fallacy of composition.
• D)fallacy of normalcy.
• E)None of the above.

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Definitions:

Market Risk Premium

The additional return expected by investors for taking on the higher risk of investing in the stock market over risk-free securities.

Dividend

A part of a company's profits distributed to its shareholders, typically every three months.

Required Return

The minimum expected rate of return on an investment necessary to compensate for the risk of the investment.

Beta

A measurement of the volatility of a stock or portfolio compared to the market as a whole.