ISTA Airlines Has Had the Worst Record of Flight Arrivals

question 33

Multiple Choice

ISTA Airlines has had the worst record of flight arrivals.It is always late.However,because of the on-time or early arrival of all flights of ISTA Airlines in the last two weeks of November,Igor,the airline analyst at CBA Investments,rated the airline very favorably on arrival times in the annual report that he publishes every December.Igor seems to be exhibiting which of the following perceptual errors?

• A) Self-serving bias
• B) Central tendency
• C) Contrast effect
• D) Recency effect
• E) Halo

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Definitions:

Flotation Costs

The costs incurred by a company when it issues new securities, including underwriting fees, legal fees, and registration fees.

Cost Of Capital

A company's calculation of the minimum return necessary to justify the cost of a capital project or investment.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of its assets and earnings.

Target Capital Structure

The optimal mix of debt, equity, and other securities that a firm aims to maintain for funding its operations.