The Refusal to Abandon a Choice from an Earlier Decision

question 43

Multiple Choice

The refusal to abandon a choice from an earlier decision even when it is no longer appropriate is called

• A) escalation of commitment.
• B) the illusion of control.
• C) intuition.
• D) groupthink.

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Definitions:

Spot Exchange Rate

The present rate at which one can purchase or sell a currency for immediate transfer.

Forward Exchange Rate

A contractually fixed exchange rate for the future exchange of currencies at a specified date, used to hedge against foreign exchange risk.

Arbitrage

The simultaneous purchase and sale of the same assets in different markets to exploit price differences for a profit.

Risk-free Rate

The expected yield from an investment that carries no risk of losing money, often identified by the returns on government bonds.