Suppose That You Hear About a Friend Who Graduated from Your

question 14

Multiple Choice

Suppose that you hear about a friend who graduated from your college in performing arts.In addition,suppose that you judge that she is more likely to be selling insurance and active in community theater than she is to be selling insurance.You have committed

• A)the anchoring and adjustment heuristic.
• B)the crystal-ball technique.
• C)the belief-bias effect.
• D)the conjunction fallacy.

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Definitions:

Full Goodwill Method

An accounting approach where goodwill is calculated as the difference between the purchase price of a subsidiary and the fair value of its identifiable net assets, including both the minority and majority interest.

Non-controlling Interest

A minority stake in a subsidiary that is not owned by the parent company, representing a portion of its equity that is not directly controllable by the parent.

Fair Value

The amount one would expect to receive from the sale of an asset or the cost to settle a liability in a well-organized transaction among market players on the date it's evaluated.

Non-controlling Interest

The portion of equity interest in a subsidiary not attributable, directly or indirectly, to the parent company.