Nadine made a business decision that turned out badly. In reflecting upon her decision, she decided it was a reasoning error that led to the faulty decision. Which one of the following areas of study best applies to this situation?
A) Corporate ethics
B) Financial statement analysis
C) Managerial finance
D) Debt management
E) Behavioral finance

Question

Quizplus · Accepted Answer

Behavioral finance is the study of how psychological factors, such as emotions and cognitive biases, affect financial decision-making. Nadine's realization that her decision was due to a reasoning error suggests that her thought process may have been influenced by cognitive biases or other psychological factors, making behavioral finance the most relevant area of study.

Nadine Made a Business Decision That Turned Out Badly