When an Investor Purchases a Share of Stock at $50

question 101

Multiple Choice

When an investor purchases a share of stock at $50 and the stock tumbles to $35, the investor with loss aversion prefers to:

• A) sell the stock at $35 and use the proceeds to make a better investment.
• B) the investor will keep the stock and avoid the losses, at least until the price returns to $50.
• C) buy more shares at 35 dollars.
• D) leave the stock market.

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