Identify a True Statement About Loss Aversion

question 65

Multiple Choice

Identify a true statement about loss aversion.

• A)It helps to explain the endowment effect and the sunk cost fallacy among people.
• B)It emphasizes that people make more losses than gains in their lives.
• C)It is the tendency to report falsely,after the fact,that one accurately predicted an outcome.
• D)It is the tendency to report falsely about a loss in order to gain sympathy and escape punishment.

---

Definitions:

Operating Lease

An agreement that permits the utilization of an asset without owning it, usually with a shorter duration than a finance lease.

Fair Value

What one would earn from selling an asset or what it would cost to shift a liability in a systematic operation with market actors on the appraisal date.

Guaranteed Residual Value

The predetermined value of a leased asset at the end of the lease term, guaranteed by the lessee or a third party.

Present Value Interest Factors

A factor that is used to determine the present value of a future sum or series of future payments, discounted at a specific interest rate.