Continuing to Support a Failing Course of Action Is Known

question 46

Multiple Choice

Continuing to support a failing course of action is known as _____.

• A)path dependency
• B)escalation of commitment
• C)group polarization
• D)participative decision making

Comprehend how managerial decisions can impact a firm's beta and overall risk profile.

Acknowledge the role of macroeconomic factors, such as inflation, on investment returns and the risk-free rate.

Grasp the importance of diversifying among various types of investments to protect against economic uncertainty.

Understand the concept of diversification and how it impacts risk in investment portfolios.

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Definitions:

Need for Closure

The desire to find an answer or to come to a decision quickly in order to alleviate uncertainty and ambiguity.

Ambiguity

The presence of uncertainty or vagueness in meaning in expressions or situations.

Need for Cognition

A psychological tendency to engage in and enjoy effortful cognitive activities.

Effortful Thinking

The process of engaging in mental activities that require significant cognitive resources, as opposed to automatic or effortless thinking.