Because of a Boom in Technology Stocks in the Late

question 18

Multiple Choice

Because of a boom in technology stocks in the late 1990s, even novice investors experience huge growth in their portfolios. As technology stocks kept going up, many investors believe that their successes was due to their stock-picking ability rather than unsustainable growth in one sector of the economy. The result for many was huge losses. This scenario illustrates the concept of

• A)availability bias.
• B)representativeness bias.
• C)anchoring-and-adjustment bias.
• D)confirmation bias.
• E)overconfidence bias.

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Definitions:

Idealist

A person who holds the metaphysical view that mind and ideas are the ultimate reality.

Measurable

Capable of being measured or quantified.

Testable

A characteristic of a hypothesis or theory that it can be subjected to empirical experiments or observations to determine its validity or accuracy.

Religious People

Individuals who follow a specific religion or possess a strong belief in a supernatural power or powers that control human destiny.