If Feedback Sources Are Concerned About the Use of the Performance

question 20

Multiple Choice

If feedback sources are concerned about the use of the performance evaluation ratings they are providing, they tend to _______________.

• A) inflate the ratings they provide
• B) deflate the ratings they provide
• C) refuse to provide ratings
• D) double-check their ratings

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Definitions:

Diversifiable Risk

The portion of an investment's risk that can be mitigated or eliminated through portfolio diversification.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables.

Covariance

A measure of how two variables move in relation to each other, used in finance to diversify portfolios and minimize risk.

Beta

A measure of a stock's volatility in relation to the overall market, indicating the level of risk associated with a particular investment.