Which of the Following Can Be Described as Involving Direct

question 134

Multiple Choice

Which of the following can be described as involving direct finance?

• A)A corporation issues new shares of stock.
• B)People buy shares in a mutual fund.
• C)A pension fund manager buys a short-term corporate security in the secondary market.
• D)An insurance company buys shares of common stock in the over-the-counter markets.

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Definitions:

Limited Information

A scenario where decision-makers have only a partial view or incomplete data about a situation or problem.

Heuristics

Mental shortcuts that allow people to solve problems and make judgements quickly and efficiently.

Availability Heuristic

Availability heuristic is a mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic, concept, method, or decision.

Anchoring and Adjustment

A psychological heuristic where initial information serves as a reference point for subsequent judgments and decisions.