Hideki and Thao Are Studying for an Exam

question 54

Multiple Choice

Hideki and Thao are studying for an exam.Thao asks the following question: "What term refers to how people use information from the past in the present?" Hideki would be most correct if he answered,

• A)"Encoding."
• B)"Memory."
• C)"Elaborative rehearsal."
• D)"Suggestive memory."

---

Definitions:

Arithmetic Average Return

A method of calculating the average return of an investment by simply dividing the sum of all returns by the number of periods.

Dollar-Weighted Return

An investment's return that takes into account the timing and amount of capital inflows and outflows, reflecting the investor's actual experienced rate of return.

Geometric Average Return

is a method of calculating the average rate of return on an investment that accounts for the effects of compounding, typically lower than the arithmetic average return.

Arithmetic Average Return

The simple mean of a series of returns generated over a period of time.