When Investors Follow a "Herd Instinct," They Make Decisions

question 7

Multiple Choice

When investors follow a "herd instinct," they make decisions:

• A) based on hearsay, not objective information.
• B) based on emotion, not objective information.
• C) as a group, inflating the prices of goods somewhat arbitrarily.
• D) based on the sound logic of a group, rather than the individual.

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Definitions:

Business Risk

The exposure a company or investor faces from the uncertainties that could affect the financial, operational, and reputational standing of a business.

Entrepreneurs

Individuals who initiate, manage, and take on the risks of a business or enterprise.

Fixed Salary

A consistent set amount of pay received by an employee, typically on a monthly or bi-monthly basis, regardless of hours worked.

Business Risk

The potential for a company to experience losses or fail to achieve its financial goals due to economic conditions, operational issues, or other unforeseen factors.