The _____ Occurs When a Rater Gives Greater Weight to Information

question 38

Multiple Choice

The _____ occurs when a rater gives greater weight to information received first when appraising an individual's performance.

• A) leniency error
• B) recency effect
• C) primacy effect
• D) central tendency

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Definitions:

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its stock, usually estimated using models like the Capital Asset Pricing Model (CAPM).

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, and typically pays dividends before common stock.

Common Stock

Shares of ownership in a corporation that entitle the shareholder to vote at shareholder meetings and receive dividends.

Beta

An indicator of how much a stock's price fluctuates in comparison to the general market.