Altering the Inputs to a Financial Plan by Changing One

question 16

Multiple Choice

Altering the inputs to a financial plan by changing one of the assumptions is called:

• A) a redundancy check.
• B) a pro forma evaluation.
• C) goal seeking.
• D) sensitivity analysis.

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Definitions:

Fundamental Attribution Error

The tendency to underestimate situational influences and overestimate personal traits as causes of others' behaviors.

Personal Factors

Individual attributes such as personality, beliefs, and experiences that influence one's behavior and perceptions.

Peter Principle

A theory suggesting that people are promoted to their level of incompetence in a hierarchical organization.

Primacy Effect

The tendency to remember and give greater importance to information that is encountered first in a sequence.