The So-Called "Gambler's Fallacy" Makes the Mistake of Not Recognizing

question 67

Multiple Choice

The so-called "Gambler's Fallacy" makes the mistake of not recognizing

• A) the low-probability events
• B) the high-probability events
• C) the independent-events situation
• D) that losses occur more frequently than wins

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Definitions:

Effective Rate

The interest rate on a loan or investment, adjusted for the effect of compounding.

Interest Rate

The rate at which a borrower is charged interest for the money borrowed from a lender.

Cash Rebate

A partial refund to someone who has paid too much money for tax, rent, or a utility, or as a promotional incentive from the purchase of goods or services.

Effective Rate

The actual interest rate earned or paid on an investment, loan, or savings account, taking into account the effect of compounding.