No Particular Stock Is a Better Buy Than Any Other

question 9

Multiple Choice

No particular stock is a better buy than any other stock if

• A)stock prices are driven by investors' "animal spirits."
• B)the random-walk theory of stock prices is incorrect.
• C)the efficient markets hypothesis is correct.
• D)actively managed mutual funds always outperform index funds.

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Definitions:

Halo Effect

The assumption that because people have one desirable trait (e.g., attractiveness), they also possess many other desirable traits (e.g., intelligence).

Fear-based Messaging

A strategy that uses scare tactics or the threat of negative consequences to influence behavior or attitudes.

Moderate-fear Message

Communication that utilizes a moderate level of fear to persuade or motivate behavior change without overwhelming the audience.

Low-fear Message

A type of persuasive message that induces a minimal level of fear, intended to influence attitudes or behaviors without causing excessive anxiety.