Which Example Best Describes the Representativeness Heuristic

question 114

Multiple Choice

Which example best describes the representativeness heuristic?

• A) "To decide if someone is a lawyer, I compare that person's characteristics to the characteristics of the typical lawyer."
• B) "To decide if someone is dishonest, I try to recall instances of that person's dishonest behavior."
• C) "To decide if someone is an environmentalist, I consider the proportion of environmentalists in the population."
• D) "To decide if someone is conscientious, I consider how easy it is to imagine them acting in a non-conscientious manner."

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Definitions:

Passive Investments

Investment strategies that involve minimal buying and selling actions, typically focused on long-term appreciation and mimicking market or sector indexes.

Regret Avoidance

Notion from behavioral finance that individuals who make decisions that turn out badly will have more regret when that decision was more unconventional.

Overconfidence

A cognitive bias where an individual overestimates their abilities or the precision of their knowledge, often leading to mistakes in judgment.

Behavioral Biases

Psychological tendencies that affect investment decisions and financial behaviors.