A Confirmation Bias in Processing Information Leads Consumers to

question 38

Multiple Choice

A confirmation bias in processing information leads consumers to

• A) be underconfident in their judgments.
• B) be overconfident in their judgments.
• C) be negative in evaluations.
• D) make emotional judgments.
• E) make cognitive judgments.

---

Definitions:

Value-Weighted Index

An index in which each component is included in proportion to its market value, making larger companies account for a bigger portion of the index.

Divisor

A mathematical component used in indices to adjust the index value, catering for changes in stock splits or similar adjustments.

Stocks

Shares of ownership in a company, entitling the shareholder to a portion of the company's profits and assets.

Repurchase Agreements

Short-term borrowing for dealers in government securities, where the dealer sells the securities to investors usually overnight and buys them back the following day at a slightly higher price.