Which of the Following Statements Is False

question 83

Multiple Choice

Which of the following statements is false?

• A) Investments with higher volatility have rewarded investors with higher average returns.
• B) Investments with higher volatility should have a higher risk premium and therefore higher returns.
• C) Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios and the returns of individual securities.
• D) Riskier investments must offer investors higher average returns to compensate them for the extra risk they are taking on.

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Definitions:

Genetic Vulnerability

An increased likelihood of developing certain diseases or conditions based on one's genetic makeup.

Schizophrenia

A chronic and severe mental disorder affecting how a person thinks, feels, and behaves, often leading to some loss of contact with reality.

Marijuana

A psychoactive drug derived from the Cannabis plant, used both recreationally and, in some jurisdictions, for medicinal purposes.

Impulsivity

The tendency to act on a whim, displaying behavior characterized by little or no forethought, reflection, or consideration of the consequences.