When Enron Failed, Many Enron Employees Lost Their Retirements Because

question 32

Multiple Choice

When Enron failed, many Enron employees lost their retirements because they had invested their retirement funds in Enron stock. Which behavioral bias is most consistent with this observation?

• A) House-money effect
• B) Over-confidence
• C) Loss aversion
• D) Familiarity

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Definitions:

Qualitative Demand Forecasting

The process of predicting future demand for a product or service based on non-quantitative information such as expert opinions and market trends.

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone in the group and is used to generate and prioritize ideas.

Ratio Analysis

A tool used in financial analysis to assess a company's performance or financial condition through the relationship between two numerical values from its financial statements.

Operational Index

A statistical measure used to gauge the performance and efficiency of business operations.