Which of the Following Statements Is TRUE

question 66

Multiple Choice

Which of the following statements is TRUE?

• A) On average, smaller stocks have lower volatility than Treasury bills.
• B) Portfolios of smaller stocks are typically less volatile than individual small stocks.
• C) On average, smaller stocks have lower returns than larger stocks.
• D) On average, Treasury bills have higher returns than stocks.

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Definitions:

MMPI

The Minnesota Multiphasic Personality Inventory, a standardized psychometric test of adult personality and psychopathology.

Demand Characteristics

Subtle cues or signals in an experiment that communicate to participants how they are expected to behave or respond.

Overconfidence Effect

A cognitive bias where an individual's subjective confidence in their judgments is greater than the objective accuracy of those judgments.

Social Desirability Bias

The tendency of respondents to answer questions in a manner that will be viewed favorably by others, often skewing the results of surveys and studies.