Liam's Mother Reveals That Although She'd Never Hid from Him

question 43

Multiple Choice

Liam's mother reveals that although she'd never hid from him that he was adopted, she did hide that he had an identical twin brother in another province. As Liam, a gay man, tries to track his brother down, he wonders what the chances are that he will be gay as well. What is the probability?

• A) It is almost certain, as studies show that where one twin is gay, 93% of identical twins are both gay.
• B) It is very low, as studies show that where one twin is gay, 7% of identical twins are both gay.
• C) It's impossible to tell as there has been no research on siblings and sexual/affectational identity development.
• D) It is better than chance as studies show that where one twin is gay, 52% of identical twins are both gay.

Define affect heuristic and its application in quick decision-making processes.

Describe the concept and implications of house money in behavioral finance.

Understand the principle of regret aversion and its effects on decision-making.

Comprehend the definition and implications of sentiment-based risk on financial markets.

---

Definitions:

Return on Equity

A measure of a corporation's profitability, calculated by dividing net income by shareholder equity, indicating how effectively equity is utilized to generate profits.

Return on Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring how efficiently assets generate profits.

Fixed Asset Turnover

A financial ratio that measures how efficiently a company uses its fixed assets to generate sales.

Du Pont Identity

A financial formula that breaks down return on equity into three component parts: profit margin, asset turnover, and financial leverage.