Even When People Are Shown Nothing but a Random Mix

question 87

Multiple Choice

Even when people are shown nothing but a random mix of results, they still like to believe one outcome is more likely than the other. This is tendency illustrates a concept known as

• A) the self-fulfilling prophecy.
• B) the representativeness heuristic.
• C) illusory correlation.
• D) social overconfidence.

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Definitions:

U.S. Dollar Equivalent

The value of a foreign currency transaction converted into U.S. dollars at the current exchange rate.

Forward Contract

A financial agreement to buy or sell a specific asset at a predetermined price at a set time in the future.

Fair Value Hedge

A financial strategy used to offset the risk of changes in the fair value of a recognized asset or liability or an unrecognized firm commitment.

Rupee

The official currency of India, also used in other South Asian countries but may differ in value.