Which of the Following Statements Is False

question 66

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:

Person-Centered Theory

A psychological perspective that emphasizes the importance of the individual's subjective experience and the inherent tendency toward growth and fulfillment.

Fixation

An obsessive focus or attachment to an individual, object, or concept, often at the expense of a more diverse range of interests or activities.

Pleasure-Seeking

Pleasure-seeking involves pursuing activities or experiences that provide sensory satisfaction or enjoyment, often driven by biological and psychological needs.

Projection

A defense mechanism where individuals attribute their own unacceptable thoughts, feelings, or motives to another person.