Imagine You Meet a Friend of a Friend and Your

question 431

Multiple Choice

Imagine you meet a friend of a friend and your initial impression of them leads you to believe that they aren't a very interesting person. You run into them every now and then and start a few superficial conversations (i.e. try to 'make small talk') but never make an effort to engage them in a deep or meaningful way. You decide that your initial impression of them must be correct, since they never seem to have anything interesting to say. What concept does this example demonstrate?

• A)cognitive dissonance
• B)group polarization
• C)the self-serving bias
• D)the fundamental attribution error
• E)a self-fulfilling prophecy

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Definitions:

Effective Annual Rate

The real return on an investment, taking into account the effect of compounding interest as opposed to just the nominal rate.

Annuity Due

An annuity in which the payments are made at the beginning of each period; contrast with ordinary annuity, where payments are made at the end of the period.

Ordinary Annuity

Uniform payments issued at sequential period endings, over a pre-defined timespan.

Savings Account

A deposit account held at a bank or financial institution that offers interest earnings and the safety of the deposited funds.