When Global Capital Markets Collectively React to International Events Like

question 49

Multiple Choice

When global capital markets collectively react to international events like Russia's default on its sovereign debt, it is common to find

• A) that there is no impact on multinational companies' ability to raise capital.
• B) an impact on the ability to raise capital.
• C) that Wall Street firms are so diversified that they are not affected by this event.
• D) All of these are true.

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Definitions:

Mood Linkage

The phenomenon where individuals in a group tend to share and experience similar moods or emotions.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members, usually in the direction of greater risk or conservatism.

Social Contagion

A phenomenon where ideas, feelings, and behaviors seem to spread across people in a group as if they were infectious diseases.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or standards.