Decision Variables

question 39

Multiple Choice

Decision variables:

• A) cannot be directly controlled by the decision maker.
• B) are assumed to be constant.
• C) are always uncertain.
• D) can be selected at the discretion of the decision maker.

---

Definitions:

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes, often used under conditions of uncertainty.

Decision-Making

The process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Overconfidence

This is a bias in behavioral finance where investors believe they have superior knowledge or capabilities, leading to overly optimistic assessments of their investment decisions.

Information Precision

The degree of accuracy and reliability of information, especially in the context of financial markets or decision-making processes.