Because the DDM Requires Multiple Estimates,investors Should

question 107

Multiple Choice

Because the DDM requires multiple estimates,investors should

• A) carefully examine inputs to the model.
• B) perform sensitivity analysis on price estimates.
• C) not use this model without expert assistance.
• D) feel confident that DDM estimates are correct.
• E) both a and b.

---

Definitions:

p Value

A statistical measure that helps determine the significance of results obtained in research, indicating the likelihood of the observed data given a particular hypothesis.

Schematic Thinking

The process of using social schemas, which are mental shortcuts, to organize and interpret information about the social world.

Assimilation Process

The cognitive process of fitting new information into pre-existing cognitive schemas, perceptions, and understanding.

Accommodation Process

The cognitive process of adjusting one's existing mental models or schemas to incorporate new information or experiences.