Linda Has Failed an Important Geography Exam and Attributes Her

question 35

Multiple Choice

Linda has failed an important geography exam and attributes her failure to a lack of ability in geography. In terms of Weiner's attribution theory, Linda has made a(n) _____ causal attribution.

• A) internal, stable
• B) internal, unstable
• C) external, unstable
• D) external, stable

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Definitions:

Equity Risk

The risk of loss associated with fluctuations in the price of equities or stocks.

M&M Proposition I

A principle in corporate finance that asserts the market value of a firm is unaffected by the capital structure, assuming no taxes and perfect markets.

M&M Proposition II

A theory proposing that the cost of equity increases with the level of debt in a company, making the firm's weighted average cost of capital remain unchanged.

Cost of Equity

The return rate that shareholders require to invest in a company's equity, taking into account the risk associated with the investment.