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hello sir
Hope you are Fine 🙂I am very glad to know if you explain following terms for me..
Q;A financial manager believes that his action will cause Earning to increase and the firm’s share price to rise in directly proportion to earnings..
WHAT is the manager behaviour illustrate??
1)Overconfidence
2)Excessive control
3)Illusion of control
4)Confirmation BiasThe correct anss is 3..but unfortunately not able to understand WHY..
Plz Help me SIR
I would be surprised if this question were to be asked in the real exam – they are not standard terms that you are expected to learn.
Overconfidence is when you are too sure of your own ability.
Excessive control is when you control more than you should.
Illusion of control is when you think you control things but really you do not.
Confirmation bias is when you decide that new evidence confirms what you already thought.
The answer is 3 because the manager is thinking his action will have that result, but in fact lots of other things will affect the share price and not just his actions.
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