The correct answer is Option B:
The illusion of control can lead investors to inadequately diversify portfolios. Researchers have found that some investors prefer to invest in companies that they may feel they have some control over, like the comp…
The correct answer is Option A:
The Standard prohibits offering, soliciting, or accepting gifts that reasonably could be expected to compromise their own or another’s independence and objectivity.
Lawrence violated the Standard by accepting a lavi…
The correct answer is Option A:
Whereas the significance level of a test is the probability of incorrectly rejecting the null, the power of a test is the probability of correctly rejecting the null, that is, the probability of rejecting the null wh…
The correct answer is Option A.
With a hindsight bias, people may see past events as having been predictable and reasonable to expect.
With a confirmation bias, people generally place excessive weight on confirmatory information; that is, they pla…
The correct answer is Option C.
There are four possible outcomes when we test a null hypothesis:
* We reject a false null hypothesis. This is a correct decision.
* We reject a true null hypothesis. This is called a Type I error.
* We do not rej…
The correct answer is Option C.
Due to the potential conflict of interest, Colson should not issue a recommendation on Ricard, as he could be perceived as lacking independence and objectivity.
The correct answer is B:
Conservatism bias is a belief perseverance bias, in which people maintain their prior views or forecasts by inadequately incorporating new information.
Confirmation bias is a belief perseverance bias, in which people te…
The correct answer is Option C:
The employees at GIA are not responsible for detailed knowledge of applicable laws; that responsibility lies with the compliance department and GIA’s legal counsel.
Faider’s summary, which highlights how the chan…
The correct answer is Option C.
A hypothesis is defined as a statement about the value of some effect size or parameter one or more populations.
To test a hypothesis, one of the steps would be to identify an appropriate test statistic and i…
CFA Institute Standards of Professional Conduct require Lee to obey the law, and, here, she violated the law by retaining records beyond the 6-year limit allowed by statute.
Lee has not violated Standard V(C) because there is no requirement to reta…
Emotional biases are the result of attitudes and feelings that can cause the decision to deviate from the rational decisions of traditional finance.
Cognitive errors stem from basic statistical, information-processing, or memory errors. Cognitive …
Option A is incorrectly stated since the appropriate formulation should be: H0: θ ≤ θ0 versus Ha: θ >θ0.
We state the null and alternative hypotheses such that they account for all possible values of the parameter.
Option A does not account fo…
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