Some Mental Shortcuts Can Cause Errors in Thinking

question 90

Multiple Choice

Some mental shortcuts can cause errors in thinking.For example,simply because you can remember an example of something very quickly and easily does not mean that you should
Rely on that information in making accurate probability judgments.This error in thinking
Reflects

• A) an analogy.
• B) insight.
• C) the availability heuristic.
• D) the representativeness heuristic.

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Definitions:

Stock Split

A corporate action to increase the number of shares by dividing each share, which decreases its price and makes it more accessible to investors without changing the market capitalization.

Market Value

The ongoing cost at which a commodity or service is available for buying or selling in the market.

Shares Outstanding

The total number of a company's shares that are currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect market value.