According to Wood (2010), Which Three Tributaries Form the River

question 137

Multiple Choice

According to Wood (2010) , which three tributaries form the river of behavioral finance?

• A) Behavioral psychology, social psychology, and quantum physics.
• B) Behavioral psychology, social psychology, and neurofinance.
• C) Behavioral psychology, contrary psychology, and quantum physics.
• D) Behavioral psychology, smart money psychology, and brain plasticity.
• E) Behavioral psychology, contrary psychology, and neurofinance.

Understand concepts of normal and inferior goods.

Grasp the factors affecting demand elasticity.

Understand the relationship between price changes and demand elasticity.

Grasp how production levels correlate with current and desired margins.

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Definitions:

Return On Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Du Pont Model

The Du Pont Model is a framework for analyzing a company's return on equity (ROE) by breaking it down into three components: profit margin, asset turnover, and financial leverage.

Net Profit Margin

A profitability metric indicating the percentage of revenue left as net income after all expenses, taxes, and costs have been subtracted.

Return On Assets

Return on assets (ROA) is a profitability ratio that measures how efficiently a company can manage its assets to produce profits during a period, calculated by dividing net income by total assets.