Cash Flows and Risk Are the Key Determinants in Share

question 68

Multiple Choice

Cash flows and risk are the key determinants in share price. Increased risk, other things remaining the same, results in ________.

• A) a lower share price
• B) a higher share price
• C) an unchanged share price
• D) an undetermined share price

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

Self-Serving Bias

The common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when judging others' behavior.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.