All of the Following Are Cognitive Biases That Can Affect

question 77

Multiple Choice

All of the following are cognitive biases that can affect manager's judgment except:

• A) being influenced by initial impressions.
• B) justifying past decisions.
• C) seeing what you don't want to see.
• D) perpetuating the status quo.
• E) overconfidence.

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Definitions:

Rate of Return

The profit or deficit from an investment during a designated time frame, represented as a fraction of the investment's initial value.

Security Market Line

A graphical representation that shows the relationship between the risk of an investment and its expected return, based on the capital asset pricing model.

Expected Return-Beta Relationship

The concept that the expected return of an investment is dependent on its beta, which measures its systemic risk relative to the overall market.

Efficient Frontier

Graph representing a set of portfolios that maximize expected return at each level of portfolio risk.