Imagine That Your Professor Is Discussing the Prevalence of Psychological

question 37

Multiple Choice

Imagine that your professor is discussing the prevalence of psychological disorders in the general population, and he says, "A study conducted in 2012 estimated that about 11% of the population has a psychological disorder at any one time." If you were to estimate a confidence interval, based on this number-11%-you would be most likely

• A) to use the confirmation bias inappropriately.
• B) to estimate this range by using the availability heuristic, which would be biased because of recent examples.
• C) to rely too heavily on an anchor, and not make large enough adjustments to that anchor.
• D) to use decision frames inappropriately.

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Definitions:

Investment Account

An account held at a financial institution that contains securities, cash, and other assets that are invested for the purpose of earning a return.

Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to its shareholders.

Indefinite Life

An intangible asset that lacks a foreseeable limit to its useful life and is not amortized but rather assessed for impairment annually.

Goodwill

An intangible asset representing the excess value of a company over its tangible assets and liabilities, often arising from brand reputation, customer relationships, or intellectual property.