Which One of the Following Is the Basis for Prospect

question 30

Multiple Choice

Which one of the following is the basis for prospect theory?

• A)Investors react differently to prospective gains and losses.
• B)Investors make cognitive errors.
• C)Some investors are irrational.
• D)Investors react differently depending on the day of the week.
• E)Investors suffer from money illusion.

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Definitions:

Blushing

The involuntary reddening of a person's face due to emotional responses such as embarrassment or shy.

Cognitive Learning

The acquisition of mental information, whether by observing events, by watching others, or through language.

Classical Conditioning

A learning method characterized by repeatedly associating two stimuli; over time, the response once elicited by the second stimulus is induced by the first stimulus solely.

Observing Events

The act of attentively watching occurrences or phenomena, often for the purpose of gathering data or understanding something better.