For Exercises 10.1 and 10.2, see page 488; for 10.3 and 10.4, see page 490; for 10.5, see pages 493494; for 10.6 to 10.8, see pages 498499; for 10.9 and 10.10, see page 500; and for 10.11 and 10.12, see page 502.

Question 10.10

10.10 Mediocrity triumphant?

In the early 1930s, a man named Horace Secrist wrote a book titled The Triumph of Mediocrity in Business. Secrist found that businesses that did unusually well or unusually poorly in one year tended to be nearer the average in profitability at a later year. Why is it a fallacy to say that this fact demonstrates an overall movement toward “mediocrity”?