Someone Tells You That If You Say "Abracadabra" Every Morning

question 89

Multiple Choice

Someone tells you that if you say "abracadabra" every morning you will stay healthy. You say it daily, and, sure enough, you stay healthy. You conclude that saying this magic word really does ensure health. What error in thinking have you made?

• A) failure to use the availability heuristic
• B) inappropriate use of categorization-by-levels
• C) over-reliance on base-rate information
• D) premature commitment to one hypothesis

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Definitions:

Subsequent-year Period

A timeframe that follows the current year, used in forecasting and planning for future financial or operational activity.

Investment Company Assets

Assets held by a company that pools together money from many investors to purchase securities such as stocks, bonds, and other financial assets.

Mutual Funds

Investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Specialized-sector Funds

Mutual funds that invest primarily in specific sectors of the economy, such as technology, healthcare, or finance, offering focused exposure to industry-specific risks and opportunities.