An Example of Financially Irrational Behavior Is

question 38

Multiple Choice

An example of financially irrational behavior is:

• A)gambling in Las Vegas.
• B)when a firm announces an increase in earnings and the stock price enjoys three days of large abnormal returns.
• C)when a firm announces an increase in earnings and the stock price enjoys an immediate surge in value which is captured in one day.
• D)Both A and B.
• E)Both A and C.

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Definitions:

Thimble

A small protective shield worn on the finger or thumb to prevent injury when sewing, or a component used to anchor or guide a rope or cable.

Equal Divisions

The act of dividing something into parts or sections that are of the same size or value.

Machinist Rule

A machinist rule is a precision measuring instrument used by machinists to measure distances and dimensions accurately.

Dial Caliper

A mechanical measuring caliper with a rotary display scale.