Incorrectly Predicting the Occurrence of a Problematic Behavior Is Known

question 43

Multiple Choice

Incorrectly predicting the occurrence of a problematic behavior is known as a(n) ______.

• A) inherent negative bias
• B) inherent positive bias
• C) false negative
• D) false positive

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Definitions:

Stock Repurchase

An action taken by a corporation to repurchase its own shares from the market, thereby decreasing the total number of shares available.

Residual Dividend Policy

A financial strategy where dividends paid to shareholders are based on the earnings left after all operational and capital expenses, as well as growth investments, have been covered.

Target Capital Structure

The mix of debt, preferred stock, and common equity that a company aims to hold to minimize its cost of capital and maximize its market value.

Forecasted Net Income

Forecasted net income is an estimate of a company's future profits after all expenses and taxes have been subtracted from revenues.