__________ Effects Can Help Explain Momentum in Stock Prices

question 34

Multiple Choice

__________ effects can help explain momentum in stock prices.

• A) Conservatism
• B) Regret avoidance
• C) Prospect theory
• D) Mental accounting
• E) Model risk

Grasp the rules for consolidation, including the percentage of ownership that generally signifies control.

Distinguish between equity securities that do and do not qualify as investments in securities (e.g., common stocks, preferred stocks, convertible bonds, stock options).

Interpret how to account for investments in debt securities, exempting certain securities that don’t qualify.

Understand the distinctions and appropriate use of the equity method, cost method, and consolidation method for accounting for investments.

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Definitions:

Emotions

Represents complex psychological states that involve a subjective experience, a physiological response, and a behavioral or expressive response.

Attitudes

Attitudes are psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor.

Experiencing

is the act of going through an event or situation, thereby gaining knowledge or skill from direct participation or observation.

Judging

The cognitive process of forming an opinion or conclusion about something or someone, based on information, observations, or experiences.