Consider the Following: a Foreign Automobile Company Builds a Manufacturing

question 35

Multiple Choice

Consider the following: A foreign automobile company builds a manufacturing plant in Tennessee and European investors buy U.S. Treasury Bonds.

• A) Both activities would be considered direct investment.
• B) Both activities would be considered portfolio investment.
• C) The auto manufacturer in engaging in portfolio investment, and the European investors are engaged in direct investing.
• D) The auto manufacturer in engaging in direct investment, and the European investors are engaged in portfolio investing.

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Definitions:

Self-Serving Bias

The tendency to attribute one’s successes to dispositional causes and one’s failures to situational causes.

Dispositional Attribution

Attributing a behavior to some internal cause, such as a personal trait, motive, or attitude; an internal attribution.

Primacy Effect

The tendency to remember information that is presented first better than information that is presented later on.

Impression Formation

The psychological process by which individuals form opinions and judgments about other people based on available information.