Anchoring Occurs When

question 24

Multiple Choice

Anchoring occurs when:

• A) someone's choices are linked to prominent but patently irrelevant information.
• B) someone's choices are linked to prominent and relevant information.
• C) someone's choices are made in the absence of relevant information.
• D) someone's choices are based solely upon proven and relevant information.

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Definitions:

Maturity Date

The specified date on a financial instrument at which the principal (and usually interest) is paid and it ceases to exist.

Required Return

The minimum gain or profit that an investor expects to earn from an investment, considering the level of risk involved.

Capital Gains Yield

The price appreciation component of the total return on an investment, excluding dividends if any.

Dividend Yield

An indicator of the proportion of dividends disbursed annually by a company to the price of its shares.