If Company a Makes a New Product Discovery and Their

question 3

Multiple Choice

If company A makes a new product discovery and their stock rises 5% this will have:

• A) no effect on Company B's stock price because it is a systematic risk element.
• B) no effect on Company B's stock price because it is an unsystematic risk element.
• C) a large effect on Company B's stock price because it is a systematic risk element.
• D) a large effect on Company B's stock price because it is an unsystematic risk element.

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Definitions:

Encoding Failure

The inability to form a memory due to insufficient attention to the details of an event or information at the time of encoding.

Decay

The process of declining in quality, power, or vitality, often used in reference to physical or biological deterioration over time.

Interference Theory

A theory that explains how new learning can cause the forgetting of previously learned information due to overlap or interference.

Retroactive Interference

A phenomenon in memory where newly acquired information interferes with the retrieval of older information.