The tendency of naive investors to buy high (after prices have risen for several periods) and sell low (after prices have dropped for several periods) can be explained by the behavioral tendency known as anchoring.
<h3>What does anchoring in purchasing behavior mean?</h3>
A behavioral finance heuristic known as "anchoring" refers to the unconscious use of unimportant information, such as the price at which a security was purchased, as a fixed reference point (or "anchor") for making decisions about that security in the future.
The cognitive bias known as "anchoring" occurs when the mere existence of an initial number has an outsized impact on later decision-making. The TV's exorbitant cost acts as an anchor that encourages buyers to spend more money than they intend to. By announcing a lower price after stating a price, the anchoring effect in making purchase decision is activated. Customers will view the higher price as being more comparable to the original, lower price than the alternative prices being provided.
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Answer:
5.97%
Explanation:
Profit margin is an example of profitability ratio
profitability ratio measures the ability of a firm to generate profit from its assets
Profit margin = net income / sales
= $23,000. / $385,000,
Answer:
D) As a disclosure only. No liability is reported
Explanation:
US GAAP requires that probable contingent liabilities (like lawsuits) are disclosed in the footnotes of the financial statements. If it is probable that the liability will exist, in this case that Hillsborough will lose the case, then they must record the contingent liability at its most reasonable amount. If the amount cannot be estimated, then they must record it at its lowest amount. The key word is "probable", since it must be likely that the event occurs in order for it to be recorded in the footnotes.
Describe how you will operate your business in terms of your involvement. If I were to own and operate my own business, I would make sure to have a good management team in place that can handle business happenings incase I am not able to be there. I would want to be highly involved from training employees at lower levels, to making sure those who work in high positions all carry out the same ethics I would like the company to encompass. It would be important for me to be as involved and present in the business I own as possible
