Electronic Brainstorming Tends to Reduce the Adverse Effects of Evaluation

question 54

Essay

Electronic brainstorming tends to reduce the adverse effects of evaluation apprehension and production blocking that occurs in traditional team decision-making sessions.Explain how these two concepts adversely affect traditional team decision making and why they are less likely to occur in electronic brainstorming.

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Definitions:

Factor Sensitivities

Refers to the responsiveness of an asset's return to changes in underlying factors, often used in the context of multifactor models to evaluate investment risk.

Multifactor APT

A model that describes the returns of an asset as dependent on various macroeconomic or market factors, extending the Arbitrage Pricing Theory (APT).

Macro Factors

Economic, social, political, and environmental variables that affect the performance of the global and regional economy.

Risk Premiums

Additional returns expected by investors for taking on higher risk compared to a risk-free asset, to compensate for the increased uncertainty.