Investors Should Avoid Buying Mutual Funds with High Fees Because

question 6

Multiple Choice

Investors should avoid buying mutual funds with high fees because mutual funds with high fees:

• A) do not systemically outperform other funds.
• B) are difficult to redeem.
• C) do not diversify enough.
• D) are always risky.

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Definitions:

Attribution Theory

A psychological theory that explains how individuals pinpoint the causes of their own and others' behavior and events.

Equity Theory

A theory in social psychology that proposes individuals assess the fairness of their relationships by analyzing their input and outcome ratios to those of others.

Philip Zimbardo

An American psychologist best known for his leadership of the Stanford Prison Experiment and contributions to the understanding of social psychology.

Simulated Prison Study

An experiment designed to study the psychological effects of perceived power, focusing on the struggle between prisoners and prison officers. It is often associated with the Stanford prison experiment.