The Study of the Cognitive Processes and Biases Associated with Making

question 70

Multiple Choice

The study of the cognitive processes and biases associated with making financial and economic decisions is known as

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

Recognize the financial implications of neglecting product quality and safety standards.

Understand the unethical practices in business competition including economic espionage.

Familiarize with laws designed to protect consumer rights including children's privacy and safety.

Understand the principles of the Fama-French Three Factor Model and its application in calculating expected stock returns.

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Definitions:

Flexible Budgets

Budgets that adjust or flex with changes in volume or activity, allowing for more accurate comparisons to actual results.

Planning and Control

Processes used by management to establish objectives, execute plans to meet those objectives, and monitor progress.

Responsibility Accounting

An accounting system that collects, summarizes, and reports financial information about different areas of responsibility within an organization.

Responsibility Centers

Divisions or units within an organization for which managers are accountable for certain activities or financial outcomes.