Answer to Question 1
B
Answer to Question 2
In practice, the relationship between the research department and the users of research frequently is characterized by misunderstanding and conflicts arising from:
(1) Research that implies criticism - managers may not want to find results that are critical of their work.
(2) Money - financial managers often see research as a cost rather than as an investment or a way of lowering risk.
(3) Time - it takes time to complete a research project, and errors are more prominent if the research is rushed.
(4) Intuitive decision making - managers are action-oriented decision makers, and they often rely on gut reaction and intuition, which is often successful. Thus, they often do not believe a research project will help improve their decision making.
(5) Future decisions based on past experience - managers wish to predict the future, but researchers measure only current or past events.
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