Carl Holds a Large Position in Stock X That Was

question 23

Multiple Choice

Carl holds a large position in Stock X that was recently downgraded. Carl's advisor recommends he sell X and take his gain, which was accumulated over the past several years. However, Carl decides not to sell X. Carl's behavior best represents:

• A) the house-money effect.
• B) representativeness bias.
• C) loss aversion.
• D) the endowment effect.

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Definitions:

Radical Behaviorists

Psychologists who explain behavior in terms of external stimuli and observable responses, minimizing the role of the mind or consciousness.

Observable Behaviors

Observable behaviors refer to actions or reactions of an individual or system that can be directly seen and measured.

Creative Part

The component of a process or system that involves innovation, imagination, and the generation of new ideas.

Active

Pertains to being engaged in action or participation, often implying energy and involvement in processes or activities.