On the First Day of Class,Dr

question 27

Multiple Choice

On the first day of class,Dr.Moskowitz is serious and tough as he reviews his rules for the course.After the first day,he is friendly and warm,but his students often continue to see him as unsympathetic and firm.This is due to

• A) the self-serving bias.
• B) cognitive dissonance.
• C) the primacy effect.
• D) lowballing.

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Definitions:

Stock Market

A marketplace where stocks, bonds, and other securities are bought and sold.

Borrow Money

The act of obtaining funds from another party with the promise of repaying the principal amount along with potential interest.

Buy Stocks on Margin

The practice of borrowing money from a broker to purchase stock, using the bought securities as collateral for the loan.

Risk Free Asset

An investment that is expected to return its original value without any loss and with a certain rate of interest; considered to have zero default risk.