Which One of the Following Defines Frame Dependence

question 68

Multiple Choice

Which one of the following defines frame dependence?

• A)Investors react differently to prospective gains and losses.
• B)Investors tend to make more cognitive errors when they view investing as gambling.
• C)Investors tend to be more irrational in bear markets than in bull markets.
• D)Investors react differently depending on how an opportunity is presented.
• E)Investors suffer from money illusion in bull markets but not in bear markets.

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Definitions:

Event

An occurrence or happening, particularly one of significance in statistics or probability.

Action

The process or state of acting or being active.

Outcome

The result or effect of an action or experiment.

Addition Rule

Combined probability of mutually exclusive outcomes is the sum of the individual probabilities.