Though Stock Prices Do Sometimes Go Down, Investing in the Stock

question 167

True/False

Though stock prices do sometimes go down, investing in the stock market has generally provided very attractive returns over the long run.

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Definitions:

Selection Bias

A distortion of statistical analysis resulting from the method of collecting samples, leading to data that is not representative of the population being studied.

Magnitude Issue

Refers to the scale or size of an issue or problem, often implying its significance or impact in a particular context.

Momentum Effect

The tendency for securities that have performed well in the past to continue performing well in the future.

Martingale Effect

A theory in probability suggesting that past events do not influence future ones, often discussed in the context of gambling or investment strategies.