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- A situation in which one focuses on individual decisions rather than looking at them in the context of related decisions. Please match the description with the corresponding term below. A.Equity Premium B.Statistically Independent C.Equity Premium Puzzle D.Narrow FramingA3) Finance Which one is a financial risk? Select one: a. Uncertainty about demand b. uncertainty about cost d. None of the aboveA financial risk is not possible to evaluate with a. Standard deviatiom b. Mean value c. Coefficient of variability d. Variability
- Critically explain each one of the following financial terms:i. Asymmetric informationii. Moral hazardiii. Adverse selectionGive examples in each case to illustrate your answer.By use of practical examples, discuss the following types of information processing errors in behavioural finance: i) Forecasting errors ii) Overconfidence iii) ConservatismCritically explain each one of the following financial terms: Asymmetric information Moral hazard Adverse selection Give examples in each case to illustrate the answer.
- Give an example of a strength and a weakness of the accounting rate of return approach.Hedging is matching the maturities of assets and liabilities to reduce risk. Hedging is matching the maturities of assets and liabilities to reduce risk. is it true or false?Risk designates any uncertainty that might trigger losses. These risks include all except: a. Market risk b. Systemic risk c. Liquidity risk d. Credit risk
- The unbiased expectations theory assumes investors are: А. Risk seeking В. Risk neutral С. Risk averse D. None of the aboveThe role of management's intent increases the risk of material misstatement re: the Existence assertion for financial investments. Question options: True FalseA reasonable probability that an investment will produce a loss a. risk b. value c. specualtion d. capital gain