If the Rater Has Seen Only a Small Specimen of the Person's

question 42

Multiple Choice

If the rater has seen only a small specimen of the person's work, an appraisal may be subject to _____.

• A) halo effect
• B) horns effect
• C) contrast error
• D) sampling error

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Definitions:

Incremental Borrowing Rate

The interest rate a lessee would have to pay if borrowing over a similar term, and with similar security, the funds necessary to lease or purchase an asset.

Lessor's Implicit Rate

The interest rate used in lease agreements, assumed by the lessor, that when applied to the lease payments, equals the fair value of the leased asset.

Ordinary Annuity

A series of equal payments made at the end of consecutive periods over a fixed length of time, such as monthly rent or annual scholarship allowances.