When Investors Follow a "Herd Instinct," They Make Decisions

question 67

Multiple Choice

When investors follow a "herd instinct," they make decisions:

• A) based on the results of performance analysis.
• B) based on emotion, not objective information.
• C) as a group, inflating the prices of goods somewhat arbitrarily.
• D) based on the sound logic of a group, rather than the individual.

---

Definitions:

Total Manufacturing Costs

Total manufacturing costs include all expenses directly related to the production of goods, including raw materials, labor, and manufacturing overhead.

Compute

To calculate or solve a problem using mathematical or logical operations.

Month

A unit of time used in calendars that is approximately based on the natural period related to the motion of the moon; months vary in length but are roughly around 30 days.

Internal Control System

A set of processes and procedures implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.