Alinda owns stock in Corporation ABC. She is a fairly astute investor and has recently discovered some new information about ABC. Her task is to evaluate this information for the purpose of deciding whether she should increase, decrease, or simply maintain her holdings in ABC. Alinda bought ABC two years ago at $12, and the stock is now at $15. Several months ago, ABC reached $20 after a surprise announcement of higher-thanexpected earnings, at which time Alinda contemplated selling the stock but did not. Unfortunately, ABC then dropped to $15 after executives were accused of faulty accounting practices. Today, Alinda feels as though she has lost 25 percent of the stocks value, and she would prefer to wait and sell her shares in ABC once it returns to its recent $20 high. Alinda has a background in accounting, and she does some research that leads her to conclude that ABCs methods are indeed faulty, but not extremely so. However, Alinda cannot entirely gauge the depth of the problem and realizes that holding ABC contains risk, but ABC is also a viable corporate entity with good prospects. Alinda must make a decision. On one hand, she has confirmed that ABC does have an accounting problem, and she is unsure of how severe the problem might become. On the other hand, the company has a solid business, and Alinda wants to recoup the 25 percent that she feels she lost. REQUIRED: I. Describe the psychological bias that Alinda is susceptible [10 Marks] II. Explain what should Alinda do? [10 Marks]