Which of the Following Statements Is FALSE

question 57

Multiple Choice

Which of the following statements is FALSE?

• A)The compounded geometric average return is most often used for comparative purposes.
• B)We should use the arithmetic average return when we are trying to estimate an investment's expected return over a future horizon based on its past performance.
• C)The geometric average return will always be above the arithmetic average return and the difference grows with the volatility of the annual returns.
• D)The geometric average return is a better description of the long-run historical performance of an investment.

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Definitions:

Abnormal Neurotransmitter Activity

Unusual or pathologically altered functioning of chemical messengers in the brain, often implicated in various mental disorders.

Atypical Antipsychotic Drugs

Medicines used to treat psychiatric conditions that work differently from traditional antipsychotic drugs, often with fewer side effects.

Dopamine Hypothesis

A theory suggesting that the imbalance of dopamine levels in the brain plays a significant role in the development of schizophrenia and other psychotic disorders.

L-dopa

A chemical precursor to dopamine, used as a medication primarily in the treatment of Parkinson's disease to increase dopamine levels in the brain and alleviate symptoms.