When a Manager Generalizes One Positive Performance Feature or Incident

question 29

Multiple Choice

When a manager generalizes one positive performance feature or incident to all aspects of employee performance, the manager is most likely guilty of ________.

• A) leniency
• B) central tendency error
• C) halo error
• D) recent behavior bias

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Definitions:

Diversified Portfolios

Investment strategies involving the mixing of various asset classes and securities to reduce risk through diversification.

Financial Distress

A scenario in which a business is unable to fulfill or struggles to pay its debts to those it owes money to.

Capital Budget

The process and plan for allocating resources for major investments or projects that a company undertakes to maintain or expand its operations.

Optimal Capital

The best mix of debt, equity, and other financing sources to maximize a firm’s value while minimizing its cost of capital.