Kevin Just Read an Authoritative Study That Shows That a Stock's

question 92

Multiple Choice

Kevin just read an authoritative study that shows that a stock's current price on the stock market is completely unrelated to its previous price. In other words, if a stock does well one week, it may or may not do well the next week. However, Kevin still only wants to sell stocks of his whose price increased over the last several weeks because he thinks they are more likely to reverse themselves the next week. Kevin is guilty of

• A)the gambler's fallacy.
• B)unrealistic confidence.
• C)the anchoring heuristic.
• D)the availability heuristic.

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Definitions:

Investing Activities

Financial transactions and decisions related to acquiring or disposing of long-term assets and investments that can affect a company's capital structure.

Cash Inflow

Refers to the money received by a business from its various activities, including sales, investments, and financing.

Inventory

The goods and materials a business holds for the purpose of resale or production.

Suppliers

Businesses or individuals that provide goods or services to another entity under agreed-upon terms.