CFA Practice Question

There are 361 practice questions for this study session.

Due to its competence and strategies, Enron was often named the "most innovative" in America. When hints of the Enron scandal first began to appear in the press, Enron employees expressed surprise and indignation that anyone would question the ethicality of many of the firm's actions. Any outsider who questioned Enron's tactics or numbers was told that they "just didn't get it." This is an example of ______.

A. the overconfidence bias
B. large financial rewards
C. loyalty to colleagues
Correct Answer: A

People tend to overestimate the morality of their own behavior. Ethical employees may make poor ethical decisions when they are overconfident or do not understand the complexity of the issues.

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