Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)Portfolios with higher volatility have historically 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:

Behaviour

Actions, reactions, or conduct of an individual or group in response to external or internal stimuli.

Self-efficacy

A belief in one's own capability to complete tasks and reach goals.

Bandura

Refers to Albert Bandura, a psychologist known for his work on social learning theory, emphasizing the role of observational learning, imitation, and modeling in behavior.

Confidence

The feeling of self-assurance arising from one's appreciation of their own abilities or qualities.