By Diversifying,the Risk of Holding Stock

question 42

Multiple Choice

By diversifying,the risk of holding stock

• A)can be eliminated.On average over the past two centuries stocks paid a higher average real return than bonds.
• B)can be eliminated.On average over the past two centuries stocks paid a lower average real return than bonds.
• C)can be reduced but not eliminated.On average over the past two centuries stocks paid a higher average real return than bonds.
• D)can be reduced but not eliminated.On average over the past two centuries stocks paid a lower average real return than bonds.

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Definitions:

Pluralistic Ignorance

A process in which members of a group individually conclude that there is no need to take action because they see that other group members have not done so.

Bystander Effect

A social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present.

Alienation

Decreasing importance of social ties and community and the corresponding increase in impersonal associations and instrumental logic; also, according to Marx, the sense of dissatisfaction the modern worker feels as a result of producing goods that are owned and controlled by someone else.

Herbert Gans

A sociologist known for his analytical work in urban sociology, media studies, and studies on the American working class.