Which of the Following Is True

question 8

Multiple Choice

Which of the following is true?

• A)Investments with higher risk generally pay a higher return than risk-free investments
• B)Investments that pay a return over a longer time horizon generally have less risk
• C)Investments with a greater variance in the size of the future payoff generally pay a lower expected return
• D)Risk-free investments are the best benchmark for measuring the risk of all investment strategies

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Definitions:

Cyclical Movement

Refers to the fluctuating trends in economic variables or indicators that follow the cyclical ups and downs of the economy over time.

Moving Average Method

A technique used in time series analysis to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Exponential Smoothing

A technique used in time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Time Series Data

Data collected at successive equally spaced points in time, often used to analyze trends, cycles, or seasonal variations.