You Believe That a Test Is Going to Turn Out

question 18

Multiple Choice

You believe that a test is going to turn out badly, but then you get an A on that test. If you then tell friends that you knew all along that you would do well on the test, you are showing

• A) hindsight bias.
• B) anchoring bias.
• C) student bias.
• D) availability bias.
• E) convergent thinking.

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Definitions:

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which in turn diminishes its price.

American Call Option

A financial derivative allowing the buyer the right, but not the obligation, to buy a specific stock or asset at a predetermined price within a certain time period.

Underlying Asset

The security or asset on which a derivative contract is based, influencing its value and characteristics.

Exercise Price

The predetermined price at which an option's underlying asset can be bought or sold.