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:

Self-Actualization

The actualization or achievement of one's skills and possibilities, seen as a motivation or necessity found in every person.

Lower-Level Needs

Basic physiological and safety needs in Maslow's hierarchy, which must be satisfied before higher-level needs for love, esteem, and self-actualization can be addressed.

Self-Actualization

A concept in humanistic psychology referring to the realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.

External Locus of Control

The belief that one's outcomes in life are controlled by external factors beyond their personal control.