According to the Discussion of the Representativeness Heuristic in Chapter

question 61

Multiple Choice

According to the discussion of the representativeness heuristic in Chapter 12,people often commit the small-sample fallacy in social situations.An example of this point is that

• A)people may form a stereotype,based on only a few members of a particular ethnic group.
• B)people frequently try to confirm their current hypothesis.
• C)people judge others in terms of personal characteristics that are easy to remember.
• D)people judge the conjunction of two events to be more likely than just one of those events.

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Definitions:

Retention Ratio

A metric that shows the percentage of net income retained in the company rather than paid out as dividends to shareholders.

Debt-Equity Ratio

The quotient representing a company's use of debt over equity, obtained by dividing its liabilities total by shareholder equity.

Total Asset Turnover

A financial ratio that measures a company's ability to generate sales from its assets by comparing net sales with average total assets.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, showing the profitability of a company.