The Endowment Effect Suggests That That People

question 27

Multiple Choice

The endowment effect suggests that that people

• A)have a strong attachment to their entitlement, regardless of whether they paid to acquire it.
• B)have a strong sense of fairness.
• C)are concerned about the welfare of others.
• D)act in ways to distort market prices.

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Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian account for holding savings and investment assets, with tax benefits.

Canadian Equity

Investments in stocks or shares of Canadian companies, representing ownership and a claim on part of the company's assets and earnings.

Annually Compounded

An interest rate compound method where the calculation of interest is done once per year.

Loan Term

The duration of time over which a loan agreement is in effect, and by the end of which the loan should be repaid.