Consumer Confidence Index V Welcome! You are encouraged to register with the site and login (for free). When you register, you support the site and your question history is saved. The stock market tends to move in response to the release of the U.S. consumer confidence index (CCI) each month, signaling that individuals make investment decisions on the basis of this information. Such a behavior is mostly irrational. The CCI is generally agreed to be a lagging indicator; by the time the CCI has been released, the stock market should have already reflected the latest adjustments to its prices based on consumer sentiment. Furthermore, the CCI, to the degree that it reflects on the stock market, reflects only on the stock market as a whole, not on individual stocks. The questions that make up the CCI, indeed, gauge individual levels of confidence about factors, such as employment rates, that should have little direct bearing on most individual stocks relative to other factors. To dampen the influence of the CCI on the stock market, the Conference Board, the nonprofit group that reveals the information each month, should adjust its timetable in order to publish the CCI outside of stock market hours. In that case, the impact of the CCI on stock market prices will be smoothed and is more likely to reflect individual investors' business estimates and not their animal whims. The passage suggests that an individual investor operating according to the animal whims mentioned in the highlighted text would be most likely to do which of the following? Make a stock market decision for reasons the individual knows or suspects not to be sound Make investment decisions in order to destroy competitors, even if those decisions undermined the individual's own position Buy and sell individual stocks according to no clear motive or rationale Reverse prior investment decisions out of a lack of confidence Invest large amounts suddenly in a particular company after a piece of new information hints at the quality of that investment Review Answer