Because It Is Easier to Think of Words That Start

question 96

Multiple Choice

Because it is easier to think of words that start with "k" than words that have "k" as the third letter, most people assume that our language has more words starting with "k" than words with "k" in the third position. That kind of reasoning is an example of

• A) cognitive maps.
• B) the Stroop effect.
• C) the availability heuristic.
• D) categorization by levels.

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Definitions:

Dividend Discount Models

Methods used to value a company's stock by discounting predicted dividends to present value.

P/E Ratios

Price-to-Earnings Ratio, a valuation metric comparing the current share price of a company to its per-share earnings.

Mispriced Securities

Securities whose market price is significantly different from their intrinsic value due to inefficiencies in the market.

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures necessary to maintain or expand the asset base.