The Validity Effect Is the Tendency of People to Believe

question 24

True/False

The validity effect is the tendency of people to believe that a statement is true simply because it has been repeated many times.

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Definitions:

Par Value

The nominal or face value of a stock or bond, set at the time of issue, and often used as an accounting value rather than a measure of market value.

Shares Outstanding

The total number of shares of stock that are currently owned by investors, including restricted shares owned by the company’s officers and insiders.

Contra Stockholders' Equity

Accounts on a company's balance sheet that have a negative balance, reducing the overall equity of stockholders.

Retained Earnings

The portion of net profits not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.