A Real-Estate Agent Is Asked by Her Clients How Much

question 79

Multiple Choice

A real-estate agent is asked by her clients how much they should ask for their house.She just sold a house for $300 000,so she finds herself suggesting an amount within the same range.This is an example of _____________.

• A)belief perseverance
• B)confirmation bias
• C)the representativeness heuristic
• D)the anchoring effect

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Definitions:

Technical Analysis

Research to identify mispriced securities that focuses on recurrent and predictable stock price patterns and on proxies for buy or sell pressure in the market.

Strong Form

Strong form is a type of efficient market hypothesis that suggests all information, both public and private, is fully reflected in stock prices, making it impossible to consistently achieve higher returns.

EMH

Efficient Market Hypothesis, the theory that all available information is already reflected in stock prices, and it is impossible to consistently achieve higher returns.

Insider Information

Knowledge about a company's activities or financial condition that has not been made public and that can provide a financial advantage in the market.