An Example of Self-Serving Bias Described in the Text Is

question 104

Multiple Choice

An example of self-serving bias described in the text is the tendency of people to

• A) see themselves as average on nearly any desirable dimension.
• B) accept more responsibility for successes than failures.
• C) be overly critical of other people.
• D) exhibit heightened racial prejudice.

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Definitions:

Interest Rate Risk

The potential for investment losses resulting from changes in interest rates.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks; it is used to determine a theoretically appropriate required rate of return of an asset.

Specific Risk

Risk associated with individual investments or a small group of assets, distinct from market risk.

Two-factor Model

A Two-factor Model in finance is an asset pricing model that uses two variables to calculate the value of an asset or the expected return.