Four of the last five stocks your investment adviser recommended have outperformed the market.Thus, you believe that if you continue to follow her advice, that 80 percent of your investments will outperform the market over the long term. This belief is based on the:
A. law of large numbers.
B. positive performance illusion.
C. clustering illusion.
D. gambler's fallacy.
E. law of small numbers.
Answer: E
Business
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