We Tend to Accept at Face Value Information That Is

question 71

Multiple Choice

We tend to accept at face value information that is consistent with our preconceived views, while we are critical and skeptical of information that challenges these views. This represents the ________ bias.

• A) distinction
• B) impact
• C) hindsight
• D) confirmation
• E) self-serving

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Definitions:

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends.

Payout Ratio

The proportion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company's total earnings.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Internal Growth Rate

The maximum growth rate a firm can achieve without resorting to external financing.