You and a Friend Are Visiting a New City and Would

question 40

Multiple Choice

You and a friend are visiting a new city and would like to splurge and go out for a fine meal. You look at the restaurant listings in the newspaper and find one that is very expensive. Your friend says: "Let's go for it. With prices like that, we're bound to have a delicious meal!" In making this statement, your friend was most likely guided by the ____.

• A)vacation effect
• B)representativeness heuristic
• C)contrast effect
• D)primacy effect

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Definitions:

Accounting Principles

The rules and guidelines that companies must follow when reporting financial data.

Interim Financial Statements

Periodic financial statements prepared during the fiscal year, providing an update on a company's financial position and performance between annual reports.

Voting Stock

Shares of a corporation's stock that entitle the shareholder to vote on company matters, such as electing directors.

Large Issuers

Refer to entities, often corporations or governments, that issue a significant volume of securities to finance their operations.