Iris Is a Vegetarian, but She Ate a Steak Last

question 167

Multiple Choice

Iris is a vegetarian, but she ate a steak last night. When would she be most likely to try to rationalize her steak-eating?

• A)If she was forced to eat the steak against her will
• B)If she was paid a lot of money to eat the steak
• C)If she chose to eat the steak and she feels guilty or nervous-regardless of whether she attributes these feelings to the steak eating
• D)If she chose to eat the steak and feels guilty or nervous and attributes these feelings to the steak eating

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Definitions:

Equity Method

An accounting technique used for recording investments in which the investor has significant influence over the investee but does not exercise full control.

Significant Influence

This term refers to the power to participate in the financial and/or operating policy decisions of another entity, but not control those policies. It is often quantified by owning 20% to 50% of the voting shares of the investee company.

Investee

The company whose stock is purchased by the investor.

Held-to-Maturity Investments

Investments in debt securities that a company has the positive intent and ability to hold until maturity.