Loss Aversion Can Be Described by Which of the Following

question 51

Multiple Choice

Loss aversion can be described by which of the following?

• A)the tendency to selling profitable investments too early.
• B)the tendency to place more emphasis on losses than on gains.
• C)the tendency to hold on to investments that are losing money for too long.
• D)all of the above.

---

Definitions:

Expected Value

Probability-weighted average of the payoffs associated with all possible outcomes.

Expected Returns

The average return an investor anticipates receiving from an investment, taking into account the probability of different outcomes.

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1, where 0 means impossibility and 1 indicates certainty.

Expected Income

The forecasted amount of money that an individual or entity anticipates receiving over a certain period.