Which of the Following Involves the Fallacy of Composition

question 202

Multiple Choice

Which of the following involves the fallacy of composition?

• A)Because sitting in the back of classrooms is correlated with getting lower grades in the class, students should always sit closer to the front of the classroom.
• B)Historically, the stock market rises in years the NFC team wins the Super Bowl and falls when the AFC wins the Super Bowl, I am rooting for the NFC team to win for the sake of my investment portfolio.
• C)When a basketball team spends more to get better players, it is more successful, which proves that all the teams should spend more to get better players.
• D)An increase in the amount of money I have will make me better off, so an increase in the supply of money in the economy will make Americans as a group better off.
• E)Both the basketball and the money supply scenarios involve the fallacy of composition.

Calculate and interpret the net asset value (NAV) of mutual funds.

Differentiate between open-end and closed-end mutual funds, including their issuance and trading characteristics.

Recognize the role and performance comparison of actively managed funds vs. market indexes.

Analyze the impact of fees and distributions on mutual fund returns.

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Definitions:

Cognition

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses.

Cultural

Relating to the ideas, customs, social behaviors, and artifacts of a society or community.

Social

Relating to society or its organization.

Attitudinal

Relating to, based on, or expressing someone's attitudes, beliefs, or perceptions.