Confirmation Bias Is A

question 26

Multiple Choice

Confirmation bias is a:

• A) tendency to accept replicated studies but not accept studies that have not been replicated.
• B) belief that bias exists in many studies that prevents them from being confirmed.
• C) tendency to believe theories that have been confirmed by empirical data.
• D) tendency to look for evidence that supports our theory and ignore evidence that contradicts it.

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Definitions:

Hedge Ratio

The ratio of the value of a hedge (protective investment) to the value of the underlying assets, indicating the part of the asset's risk that is being mitigated.

Hedged Portfolio

An investment portfolio that uses strategies to offset potential losses or gains, aiming to reduce the risk of adverse price movements in its assets.

Delta

In finance, delta represents the rate of change of the theoretical option price with respect to changes in the underlying asset's price.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specified time.