In a Well-Functioning Financial Market,the Only Way to Get Consistently

question 15

Multiple Choice

In a well-functioning financial market,the only way to get consistently higher returns over the long run is to take more risks.This is known as the

• A) risk-return principle.
• B) diversification principle.
• C) fixed income principle.
• D) price appreciation principle.

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Definitions:

Statistical Analysis

The process of collecting, reviewing, interpreting, and presenting data to discover underlying patterns and trends.

P < .01

Indicates that the probability of the observed data (or more extreme) given that the null hypothesis is true is less than 1%, suggesting strong evidence against the null hypothesis.

Null Hypothesis

A presumption in statistical inference that indicates no significant variance between groups or no significant relationship between variables.

Statistic

Numeric characteristic of a sample.