Peter Hesitates When It Comes to Picking an Individual Stock

question 20

Multiple Choice

Peter hesitates when it comes to picking an individual stock to purchase as he feels that he will later realize that a different stock would have been a better investment. Peter is suffering from:

• A)money illusion.
• B)frame dependence.
• C)regret aversion.
• D)risk-taking.
• E)mental accounting.

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Definitions:

Assets

Resources owned or controlled by a business, expected to bring future economic benefits.

Capital

It refers to financial assets or the financial value of assets, such as funds held in deposit accounts and/or funds obtained from special financing sources.

Revenue

The total income generated from normal business operations, including sales of products and services before any expenses are subtracted.

Liabilities

Debts or obligations of a business that arise during the course of its operations.