Propinquity Is a Factor That Is Related to the Power

question 4

Multiple Choice

Propinquity is a factor that is related to the power of a reference group.How will it influence the relative power between a membership group and an avoidance group?

• A) Propinquity should make membership groups much stronger than dissociative groups.
• B) Propinquity should make membership groups and dissociative groups equal in potential power.
• C) Propinquity should make membership groups weaker than dissociative groups, because the motivation to distance oneself is increased with closeness.
• D) Propinquity should make dissociative groups more powerful than membership groups because propinquity has no effect on membership groups.

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Definitions:

EAR

stands for Effective Annual Rate, a calculation that reflects the annual interest on an investment or loan, taking into account the effect of compounding interest.

APR

Annual Percentage Rate, which represents the annualized cost of credit including interest and other charges, helping consumers compare the cost of loans.

Continuous Compounding

Continuous compounding refers to the process of calculating interest on an investment, where the interest amount is reinvested and earns additional interest continuously, leading to exponential growth.

Sharpe Ratio

A metric used to assess the risk-adjusted return of an investment portfolio.