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Capital Market Expectations
Capital Market Expectations
Easy
An analyst tests 80 variables against equity returns at the 5% significance level and finds 4 that are statistically significant. None of the 4 variables has a clear economic rationale. The analyst's findings most likely reflect:
A
Data-mining bias, because the number of significant results is consistent with random chance
B
Time-period bias, because the results are specific to the sample dates chosen
C
Survivorship bias, because only the significant variables are reported
D
Genuine predictive relationships, because 4 out of 80 exceeds typical false discovery rates
Select an answer to continue
Tags
#data-mining-bias
#multiple-testing
#false-positives
#analyst-biases
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