The Study of the Cognitive Processes and Biases Associated with Making

question 63

Multiple Choice

The study of the cognitive processes and biases associated with making financial and economic decisions.

• A) asset pricing model
• B) behavioral finance
• C) efficient market hypothesis
• D) stock market bubble

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Definitions:

Inventory Turnover

Measures how often a company sells and replaces its stock of goods within a period, reflecting inventory management efficiency.

Times Interest Earned Ratio

A financial metric assessing a company's ability to meet its debt obligations, calculated as earnings before interest and taxes divided by interest expense.

Acid-test Ratio

A liquidity ratio that measures a company’s ability to pay off its current liabilities with quick assets, excluding inventory.

Accounts Receivable Turnover

A financial ratio that measures the efficiency of a company in collecting its receivables or the credit it has extended to customers.