A(n) ________ in the Volatility of Assets of the Firm

question 90

Multiple Choice

A(n) ________ in the volatility of assets of the firm benefits ________ at a cost to debt holders.

• A) decrease, equity holders
• B) increase, equity holders
• C) decrease, directors
• D) increase, directors

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Definitions:

Mere Exposure Effect

The phenomenon that repeated exposure to novel stimuli increases liking of them.

Other-Race Effect

The tendency to recall faces of one’s own race more accurately than faces of other races. Also called the cross-race effect and the own-race bias.

Explicit and Implicit Attitudes

Explicit attitudes are conscious beliefs that can guide decisions and behavior, while implicit attitudes are unconscious beliefs that can influence actions and perceptions.

Stereotypes

Widely held but fixed and oversimplified images or ideas about a particular type of person or thing.