The Change in a Person's Behavior Because He or She

question 54

Multiple Choice

The change in a person's behavior because he or she is being observed is:

• A)habituation
• B)observer bias
• C)event sampling
• D)reactivity

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Definitions:

Inherent Risk

The possibility of inaccurate financial statements due to factors other than failure of control, covering areas such as industry characteristics and overall economic environment.

SML

The Security Market Line, a graphical representation of the Capital Asset Pricing Model showing the relationship between the expected return of a security and its beta (systematic risk).

Required Returns

The minimum expected return on an investment, determined by the investor's risk tolerance and the investment's risk level.

Diversifiable Risks

Risks that can be reduced or eliminated through diversification in an investment portfolio.