- Option : C
- Explanation :
**Hubris:**Richard Roll in 1986 spelled out his hubris hypothesis for merger activity. Hubris means over-weaning self-confidence or, less kindly, arrogance. Managers commit errors of over-optimism in evaluating merger opportunities due to excessive pride or faith in their own abilities. The suggestion is that some acquirers do not learn from their mistakes and maybe convinced that they can see an undervalued firm when others cannot. They may also think that they have the talent, experience, and entrepreneurial flair to shake up a business and generate improved profit performance.

Note that the hubris hypothesis does not require the conscious pursuit of self-interest by managers. Th ey may have worthy intentions but can make mistakes in judgment.

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37. The major factor that allowed Portfolio Theory to develop into Capital Market Theory is

- Option : A
- Explanation :
**Development of Capital Market Theory:**The major factor that allowed Markowitz portfolio theory to develop into capital market theory is the concept of a risk-free asset, that is, an asset with zero variance. As we will show, such an asset would have zero correlation with all other risky assets and would provide the risk-free rate of return (RFR).

This assumption of a risk-free asset allows us to derive a generalized theory of capital asset pricing under conditions of uncertainty from the portfolio theory. This achievement is generally attributed to William Sharpe (1964), who received a Nobel Prize for it, but Lintner (1965) and Mossin (1966) derived similar theories independently.

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39. Match the terms with the statement given below:

(a) Human behaviour results from a continuous and multidirectional interaction between the person and the situation | (i) Interactionalism |

(b) People are central to the organization and they must be developed to their potential | (ii) Productivity Approach |

(c) Manager’s efficiency depends on optimum utilization of resources | (iii) Contingency Approach |

(d) The belief that there is no one best option available for an organization | (iv) HR Approach |

- Option : A
- Explanation :

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- Option : C
- Explanation : Statistics are numerical characteristics of samples. Parameters are numerical characteristics of populations. When used to estimate a parameter, a statistic is termed an
estimator. Sample statistics are often symbolized by Roman letters, and population parameters are often symbolized by Greek letters.

Good estimators are efficient and unbiased. An efficient estimator requires a minimum of cases to generate a good estimate. An unbiased estimator neither overestimates nor underestimates a parameter. The sample mean ( X ), sample variance (s2), and sample proportion (p) are efficient and unbiased. The sample standard deviation (s) is efficient and has negligible bias.

Point estimates state-specific values. Interval estimates state a range of likely values. Sampling error is the difference between the sample statistic and the population parameter (sampling error = sample statistic – population parameter). A sampling distribution is the distribution of a statistic that results from selecting an infinite number of random samples of the same size from a given population.

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