The Stock Market's Reaction to Divestitures May Actually Be Positive

question 72

True/False

The stock market's reaction to divestitures may actually be positive if the divestiture is perceived to rid the company of an unprofitable business, or if it seems to sharpen the company's focus.

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Definitions:

False-Consensus Effect

The tendency of individuals to overestimate the extent to which their beliefs, values, or opinions are shared by others.

Perceptual Error

A mistake in interpretation arising from inaccuracies in the sensory input or processing.

Self-Serving Bias

A cognitive bias that involves individuals attributing their successes to internal or personal factors and their failures to external or situational factors.

Johari Window

A model used to improve understanding between individuals within a group, which describes four quadrants of self-awareness: open, hidden, blind, and unknown.