Question
1. Which of these statements best describes the concept of frame dependence? A) A reluctance to sell investments after they have fallen in value. B)
1. Which of these statements best describes the concept of frame dependence?
A) A reluctance to sell investments after they have fallen in value.
B) When people engage in mental accounting, they tend to segment their money into different parts.
C) The Cleveland Browns have won at least half their games only 3 times since 1990.
D) When an investment problem is presented in two different (but really equivalent) ways, investors often make inconsistent choices.
2. Which of the following about Overconfidence and Trading Frequency is FALSE?
A) Households that trade more earn higher returns on average
B) If you are overconfident about your investment skill, it is likely that you will trade too much.
C) Men trade about 50 percent more than women.
D) Single men are much riskier than single women.
3. What effect refers to the unwillingness of investors to take a risk following a loss?
A) The Illusion of Knowledge
B) The Snakebite Effect
C) The Hot-Hand Fallacy
D) Get-Evenitis
4. What is Anchoring?
A) Selling stocks short, then buying them back for a lower price
B) Hesitation in selling long-term investments
C) Associating a stock with its purchase price (i.e., fixating on a reference price)
D) An occupational requirement for sailors
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