Don Is Convinced That It Would Be Best If the U.S

question 292

Multiple Choice

Don is convinced that it would be best if the U.S. was on a gold standard. He enthusiastically reads any editorials or articles that confirm his view. He frequently dismisses editorials and articles that argue against the gold standard because he presumes they are flawed or written by "crackpots." Don's behavior is an example of which of the following systematic mistakes that people make?

• A) people are overconfident
• B) people give too much weight to a small number of vivid observations
• C) people are reluctant to change their minds
• D) All of the above are correct.

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Definitions:

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Sales

The total amount of goods or services sold by a company in a particular period of time.

Z Score Model

A statistical model that predicts the probability of a company going bankrupt based on several financial ratios derived from the company's financial statements.

Financial Ratios

Quantitative metrics derived from financial statement analysis used by investors and analysts to evaluate a company's financial health and performance.