Milo and Shirley Are Taking a Trip on a Cruise

question 89

Multiple Choice

Milo and Shirley are taking a trip on a cruise ship for their 20th wedding anniversary.They believe they made it to this milestone because they know each other so well.During the trip they take part in a game show where they find out they don't know each other as well as they thought.However,they still maintain they are very much in tune with the other's needs and thoughts.This is an example of

• A)the availability heuristic.
• B)belief perseverance.
• C)the hindsight bias.
• D)the representativeness heuristic.

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Definitions:

Market Portfolio

encompasses all available assets in the market, with each asset weighted according to its market capitalization.

Portfolio Variance

A measure of the dispersion of returns of a portfolio, indicating the level of investment risk.

Cyclical Stock

Shares of companies whose earnings are heavily influenced by economic cycles, often rising during expansions and falling during recessions.

Countercyclical Stock

A stock of a company whose performance is inversely related to the economy's overall performance; it tends to do well during economic downturns.