Prospect Theory Is Based on the Concept That Investors Are

question 81

Multiple Choice

Prospect theory is based on the concept that investors are:

• A) always risk takers.
• B) risk-adverse regarding losses.
• C) risk-taking regarding losses.
• D) always risk-averse.
• E) neutral regarding risk.

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Definitions:

B.F.Skinner

An American psychologist known for his work in behaviorism, particularly the development of the theory of operant conditioning, which relates behaviors to their consequences.

Operant Conditioning

A learning framework in which the force of a behavior is altered by the administration of rewards or corrective actions.

Spontaneous Recovery

A conditioned response that had been eliminated reemerges after a time without any contact with the stimulus that initially created it.

Respondent Behavior

Behavior that occurs in response to specific stimuli and is usually conditioned by previous experiences.