Investment Risk Is

question 68

Multiple Choice

Investment risk is

• A) the probability of achieving a return that is greater than what was expected.
• B) the probability of achieving a beta coefficient that is less than what was expected.
• C) the probability of achieving a return that is less than what was expected.
• D) the probability of achieving a standard deviation that is less than what was expected.

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Definitions:

Overall Set

The complete or total collection of elements, items, or objects under consideration.

Anchoring

The tendency people have to unconsciously base, or “anchor,” the valuation of an item they are currently thinking about on recently considered but logically irrelevant information.

Irrelevant Information

Information that has no bearing on the decisions being made, providing no value to the decision-making process.

Anchoring

A cognitive bias that describes the human tendency to rely too heavily on the first piece of information offered when making decisions.