Asked by Juliana Quintero on Jun 15, 2024
Verified
When a CEO believes (unrealistically) that a new product her firm is developing will be a huge success, she suffers precisely from:
A) overconfidence.
B) over-optimism.
C) over-precision.
D) overcorrection.
CEO
Chief Executive Officer, the highest-ranking individual in a company or organization, responsible for making major corporate decisions.
New Product
A good or service that has recently been introduced to the market and was not available to consumers before.
Over-optimism
The tendency to overestimate the likelihood of positive outcomes in various situations, often affecting judgment and decision-making.
- Discern the impact that behavioral predispositions such as overconfidence, over-optimism, and over-precision exert on the decisions of investors and on occurrences like market bubbles.
Verified Answer
BA
Brian ArellanoJun 21, 2024
Final Answer :
B
Explanation :
Over-optimism refers to the tendency to hold a rosier outlook on the outcomes of events or decisions than is realistically warranted. In this case, the CEO's belief in the success of a new product, despite potentially lacking realistic evidence, aligns with over-optimism.
Learning Objectives
- Discern the impact that behavioral predispositions such as overconfidence, over-optimism, and over-precision exert on the decisions of investors and on occurrences like market bubbles.