People ascribe a stereotype to everybody in the subject group. All English people have bad teeth. In fact, these researchers were not able to locate anybody who believes that a stereotype is true of all members of the stereotyped group. Stereotypes are probabilistic tools, and even the most dull-witted human beings seem to know this. People who believe that Mexicans are lazy or that the French don't wash, understand perfectly well that there are losts of industrious Mexicans and fragrant Frenchmen.
Stereotypes exaggerate group characteristics.
No, they don't. Much more often, the opposite is true. It is not true that stereotypes generally exaggerate group differences. As in this example, they are much more likely to downplay them. Stereotypes blind us to individual characteristics.