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Question
According to the theory of recency bias, investors tend to believe the financial markets will:A. gravitate to their long-term average rates of return.
B. react over the next year in direct opposition to the performance of the prior year.
C. have a maximum of three years of positive annual returns before declining somewhat.
D. continue to perform as they have over the past couple of years.
E. tend to reverse direction at least every five years.
Answer
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