Bias, the Tendency for Samples to Differ from the Corresponding

question 17

Essay

Bias, the tendency for samples to differ from the corresponding population in some systematic way, might be due to: (a) selection bias, (b) response bias, and/or (c) nonresponse bias. In a few sentences, discuss the differences among these different biases.

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Definitions:

Required Rate

The minimum percentage return that an investment must yield to be considered acceptable. It is essentially another term for the required return on investment, critical for financial planning and analysis.

Cash Flows

Cash flows are the net amount of cash and cash-equivalents being transferred into and out of a business.

Required Return

The minimum expected return on an investment, necessary to compensate for the risk taken by the investor.

IRR

The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments. It is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.