What Type of Errors Occur When an Appraiser Avoids Giving

question 24

Multiple Choice

What type of errors occur when an appraiser avoids giving any ones and fives on a five-point scale leading to difficulties in discerning the best and worst performers?

• A) Halo effect
• B) Leniency errors
• C) Central tendency errors
• D) Severity errors

---

Definitions:

Borrowing

The act of obtaining funds from a lender under the agreement to repay with interest.

Par Value

A nominal value assigned to a security, such as a share of stock, representing the minimum price at which the security can be issued.

Premium

An amount paid in addition to the standard or expected cost, often for insurance coverage or higher quality goods and services.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.