Johnny Assumes That Because Lola Enjoys Reading and Spends Considerable

question 83

Multiple Choice

Johnny assumes that because Lola enjoys reading and spends considerable time in the library,she probably isn't going to the football game on Saturday.Why might Johnny be wrong?

• A)He has fallen prey to the hindsight bias.
• B)He is relying on the availability heuristic.
• C)He considered only the base rate in making his assumption.
• D)He is relying too heavily on the representativeness heuristic.

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Definitions:

Option Contract

A legal agreement between two parties granting one the option, but not the obligation, to buy or sell an asset at a predetermined price within a specified period.

Revoked

The act of officially canceling or withdrawing a right, privilege, or membership.

Commercial Reasonableness

A standard used to evaluate the appropriateness of actions taken in a business context, ensuring they align with typical business practices and norms.

Business Judgment

refers to the decision-making process by corporate directors and officers that is presumed to be in the best interest of the company, protecting them from liability if the decisions are made in good faith and with reasonable care.