A Sudden Realization of the Solution to a Problem Is

question 186

Multiple Choice

A sudden realization of the solution to a problem is called

• A) framing.
• B) insight.
• C) a heuristic.
• D) belief perseverance.

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Definitions:

Asset Allocation

Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon.

Information Ratio

A ratio used to measure the return of a portfolio or fund relative to its risk, often used to assess the skill of a portfolio manager.

Risk-Free Return

The theoretical return attributed to an investment with zero risk, typically associated with government bonds.

Jensen Portfolio

A portfolio evaluated using Jensen's Alpha, which measures the excess return of the portfolio over the predicted return by the CAPM model for its level of risk.