In the Hindsight Bias

question 101

Multiple Choice

In the hindsight bias,

• A) people rely too much on an anchor, and they fail to make appropriate adjustments.
• B) the availability heuristic is more useful than the representativeness heuristic.
• C) people believe that their foresight is more accurate than their hindsight.
• D) people overestimate their accuracy for predicting past events.

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Definitions:

ROE

A financial ratio expressing the profitability of a firm in relation to stockholders' equity, used to assess how efficiently a company uses investments to generate profit.

Common Equity

The portion of a company's equity that is held by common shareholders, represented by common stock.

Net Income

The profit a company generates after all expenses, taxes, and costs have been subtracted from total revenue.

Taxes

Compulsory financial charges imposed by a government on individuals, entities, or transactions to fund public expenditures.