In the Context of Biases and Heuristics That Affect an Individual's

question 43

Multiple Choice

In the context of biases and heuristics that affect an individual's decision-making strategies,_____ refers to the fact that people are reluctant to give up on a venture because of past investment.

• A)sunk cost fallacy
• B)endowment effect
• C)hindsight bias
• D)object permanence

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage on loans or earned on savings.

Net Present Value

A financial metric that calculates the present value of all future cash flows associated with a project, minus the initial investment cost.

Interest Rate

The percentage charged on a loan or paid on savings, representing the cost of borrowing or the reward for saving.

Present Value

The present value of an anticipated amount of money or series of payments, considering a certain rate of return.