The "Barnum Effect," in Which Vague Statements About One's Future

question 14

Multiple Choice

The "Barnum effect," in which vague statements about one's future or personality may be seen as accurate and valid, occurs because of the __________.

• A) self-fulfilling prophecies it creates
• B) representativeness heuristic
• C) base rate information it relies on
• D) principle of the "sucker effect"

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Definitions:

Excess Cash

Funds that exceed the normal operational needs of a business, which may be used for investment or other purposes.

Earnings Per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability.

Stock Repurchase

A transaction in which a company buys back its own shares from the market, often to increase the value of remaining shares by reducing the supply.

Excess Cash

Funds that exceed the normal operating needs of a company, potentially available for investment or distribution to shareholders.