Because the Average Consumer Operates in a Complex Environment,the Human

question 57

Multiple Choice

Because the average consumer operates in a complex environment,the human brain attempts to organize and interpret information with a process called:

• A)selective retention.
• B)selective attention.
• C)selective exposure.
• D)selective perception.

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Definitions:

Nonsystematic Risk

The risk associated with an individual asset or investment, resulting from factors specific to its issuer's performance and not the broader market.

Security Characteristic Line

A graph that shows the relationship between the returns of a security versus the returns of the market, used in the analysis of a security's risk and return.

Benchmark Error

Use of an inappropriate proxy for the true market portfolio.