If You Were to Ask a Large Group of Adults

question 40

Multiple Choice

If you were to ask a large group of adults to tell you whether they thought their personalities had "stayed the same" or "changed a good deal," you should expect that:

• A) most people would report that their personalities had stayed the same
• B) most people would report that their personalities had changed a good deal
• C) the people would be split into two equal-sized groups, with half reporting stability and half reporting change
• D) the response you got would be heavily dependent on age, with younger adults reporting more stability and older adults reporting more change

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Definitions:

Risk-Free Rate

The return on investment with no risk of financial loss, often represented by the yield on government bonds.

Market Risk Premium

The additional return investors expect for holding a risky market portfolio instead of risk-free assets.

Required Return

The minimum expected return by investors for undertaking an investment, considering its risk and the time value of money.

Index Fund

A type of mutual fund or exchange-traded fund designed to replicate the performance of a specific market index by holding the same investments as the index.