The Concept of Cumulative Risk Is Used to Describe the Idea

question 91

Multiple Choice

The concept of cumulative risk is used to describe the idea that as the number of

• A) environmental risk factors increase, children's performance on IQ tests decreases.
• B) environmental risk factors decrease, children's performance on IQ tests decreases.
• C) children in a family increases, performance on IQ tests decreases.
• D) factors associated with poverty increase, risk for academic difficulties decrease.

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Definitions:

Unexpectedly High Earnings

Unexpectedly high earnings refer to a company's reported profits that significantly exceed analysts' forecasts or the company's own guidance.

Abnormal Price Change

A significant variation in the price of a security or trading instrument that cannot be explained by market fundamentals and might be attributed to extenuating circumstances or events.

Selection Bias

Selection bias is a distortion in statistical analysis resulting from the method of collecting samples, potentially causing results to not be representative of the wider population.

Market Efficiency

The degree to which market prices fully reflect all available information and expectations, enabling securities to be priced appropriately.