If Mike and Fred Both Had Car Accidents,which of the Following

question 27

Multiple Choice

If Mike and Fred both had car accidents,which of the following represents how Mike would explain both accidents based on the fundamental attribution error and actor-observer bias

• A) Mike's accident had an external cause and Fred's had an internal cause. 
• B) Mike's accident had an internal cause and Fred's had an external cause. 
• C) Both accidents had external causes. 
• D) Both accidents had internal causes.

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Definitions:

T-bills

Treasury bills, short-term debt obligations issued by the government with a maturity of less than a year, considered risk-free.

Option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a set price within a specific period.

Firm Completion

A commitment to finish a project or deliver a product by a specified date.

Asymmetric Information

Assumes managers have more complete information than investors about a firm’s prospects—can have an important effect on capital structure.