A Person Goes Around Banging a Drum Each Day

question 41

Multiple Choice

A person goes around banging a drum each day.You ask him why.He replies,"To drive off the tigers!" You reply "But there aren't any tigers around here." He replies,"See,it works!" From a science viewpoint,this conclusion

• A)is science because it is predictive of what will happen tomorrow morning.
• B)is scientifically valid because there is probably a connection between loud noise and absence of tigers.
• C)is not valid unless there is the potential for tigers to be here,or a test is run with tigers.
• D)cannot be scientifically treated because it involves human behavior.

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Definitions:

Replacement Cost

The current cost of replacing an asset with a similar one at its current market value.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield on government securities like U.S. Treasury bonds.

Market Portfolio

A theoretical portfolio that contains all assets in the market, with each asset weighted according to its market capitalization.

Required Rate

The minimum annual percentage return that an investment must yield to be considered a viable option by an investor.