Which of the Following Statements Is Correct

question 114

Multiple Choice

Which of the following statements is correct?

• A)A large,well-known corporation such as Intel generally would use financial intermediation to finance expansion of its facilities.
• B)On average,managed funds outperform indexed funds.
• C)Unlike corporate bonds and stocks,checking accounts are a medium of exchange.
• D)A mutual fund is a financial market.

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Definitions:

Endowment Effect

A cognitive bias where individuals value an owned object higher than its market value simply because they own it.

Anchoring Effect

A cognitive bias in decision-making where individuals rely too heavily on the first piece of information (the "anchor") offered when making decisions.

Behavioral Economics

A field of economics that studies the effects of psychological, social, cognitive, and emotional factors on economic decisions.

Time Inconsistency

The tendency of individuals to change their plans or preferences over time in ways that they themselves will later regard as being against their own interests.