Which of the Following Is Not a Reason Why a Mechanical

question 45

Multiple Choice

Which of the following is not a reason why a mechanical combination of data yield better results than a judgmental combination?

• A)The accuracy of prediction may depend on the proper weighting of predictors.
• B)Data on additional applicants are added to already available data, so more accurate statistical models can be created.
• C)Decision makers relying on judgment can do better than a statistical model only if they are thorough, objective, and systematic in both collecting and combining the information.
• D)Decision makers are more likely to add considerable error if they are allowed to combine judgmentally both subjective data along with objective data.

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Definitions:

Conversion Premium

The extra amount over the current value of the underlying asset that convertible security holders pay when converting into common stock.

Convertible Bond

A type of bond that can be converted into a predetermined number of shares of the issuing company's stock, at certain times during its life, usually at the discretion of the bondholder.

Conversion Price

The predetermined price at which convertible securities can be exchanged for a specified number of shares.

Convertible Bonds

Bonds that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.