Which of the Following Statements Is True

question 13

Multiple Choice

Which of the following statements is true?

• A) Except for tax-exempt investors and tax-deferred accounts, annual tax payments increase investment returns.
• B) The only way to maintain purchasing power over time is to invest in bonds.
• C) After adjusting for taxes, long-term bonds consistently outperform stocks.
• D) An asset allocation decision for a taxable portfolio that does not include a substantial commitment to common stocks may make it difficult for the portfolio to maintain real value over time.
• E) None of the above

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Definitions:

Environmental Influences

Refers to external factors such as culture, education, and social relationships that impact an individual's development and behavior.

Genetic Influences

The impact of genes inherited from parents on various aspects of an individual's physical and behavioral traits.

Twin-Study Method

A research strategy used in genetics and psychology to differentiate between genetic and environmental influences by comparing the similarities between monozygotic (identical) and dizygotic (fraternal) twins.