The idea that decision makers find the notion of an actual loss more painful than giving up the possibility of a gain is called
A. a heuristic.
B. an availability bias.
C. a representativeness bias.
D. the prospect theory.
E. satisficing.
D. the prospect theory.
Scholars have advanced what is known as the prospect theory, which suggests that decision makers find the notion of an actual loss more painful than giving up the possibility of a gain. We see a variant of this in the tendency of investors to hold on to their losers but cash in their winners.
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Total contribution margin is defined as:
A. cost to produce times units sold. B. total sales revenues less total variable costs. C. total variable costs less fixed costs. D. selling price times units sold.
NAICS stands for
A. New Auto Industry Classification System. B. National Automakers Industry Classification System. C. North American Initiative for Competitive Structure. D. North American Industry Classification System. E. National Apparel Industry Classification System.
An error in the period-end inventory balance will cause an error in the calculation of cost of goods sold.
Answer the following statement true (T) or false (F)
Assume an investor thinks the stock market is about to undergo a sharp retreat. Under these conditions, the investor's best course of action would be to
A) buy stock-index futures contracts. B) short sell stock-index futures contracts. C) use single stock futures to sit out the market. D) use a long hedge against the investor's existing positions.