Christine Has Been Following the State Lottery for Over a Year

question 8

Multiple Choice

Christine has been following the state lottery for over a year, and she has a record of the number of times every number has been selected. She is ready to invest R1000 in lottery tickets with the same six-number combination on each ticket. She is going to choose the six numbers that have occurred the least frequently in the last year because she is sure they will be picked eventually. In this case, Christine is showing evidence of

• A) the availability heuristic.
• B) the base rate fallacy.
• C) the gambler's fallacy.
• D) the conjunction fallacy.

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Definitions:

Inflation Rate

The percentage increase in the general level of prices for goods and services over a specified period.

Chain-Weighted Indexes

Economic metrics that adjust the weighting of elements in an index to reflect changes in market or economic conditions over time.

Fixed-Weight Indexes

Economic measures where the quantities of the components are kept constant over time, allowing for the comparison of different periods based solely on price changes.

Equivalent Annual Annuity

The Equivalent Annual Annuity is a financial concept used to evaluate the annual return on an investment that has a different payment schedule, by converting it into an annuity with the same total present value.