The Fact That the Money Managers That Earned the Best

question 101

Multiple Choice

The fact that the money managers that earned the best returns last year tend to attract more money this year than the average money manager is an example of:

• A) the money effect.
• B) the clustering illusion.
• C) the endowment effect.
• D) the house money effect.
• E) overconfidence.

---

Definitions:

Life Cycle

Refers to the series of stages that an organism, product, or service goes through from its beginning to its end.

Ownership-based Governance

A system where ownership rights are central to decision-making processes and governance structures.

Due Diligence

A comprehensive appraisal of a business or individual’s financial performance, legal obligations, and other details conducted before entering into an agreement or transaction.

Short-termism

The focus on immediate results or benefits at the expense of long-term interests or sustainability.