Assume That You Invest $750 at the End of Each

question 24

Multiple Choice

Assume that you invest $750 at the end of each quarter for the next 20 years in a mutual fund.The annual rate of interest that you expect to earn in this account is 5.25%.The amount in the account at the end of 20 years is

• A) $60,000.00
• B) $105,039.84
• C) $37,009.35
• D) $123,510.52
• E) $115,637.37

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Definitions:

Confirmation Error

A cognitive bias that involves favoring information that confirms pre-existing beliefs or values, while disregarding evidence that contradicts them.

Escalating Commitment

The phenomenon where people increase their investment in a decision despite new evidence suggesting that the decision was wrong.

Framing Error

A cognitive bias where information is presented or perceived in such a way that it leads to incorrect conclusions or decisions.

Lack-of-participation Error

A bias or error in decision-making that occurs when not all stakeholders or team members are involved or engaged in the process.