Malcolm Has Been Watching a Roulette-Type Game at a Local

question 10

Multiple Choice

Malcolm has been watching a roulette-type game at a local charity bazaar. The game has only ten numbers on the wheel, and every number except 8 has come up as a winner during the last 15 minutes. Malcolm decides to bet $10 on number 8, because it has to come up eventually. In this case, Malcolm is showing evidence of the

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

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Definitions:

Owner's Equity Statement

A financial document that details changes in the equity of a business's owner(s) over a period of time.

Income Statement

A financial document that shows a company's revenues and expenses over a specific period, culminating in the net income.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position at a particular date, reporting assets, liabilities, and equity.

Total Assets

The sum of all resources owned by a company, valued in monetary terms.