Use the Table for the Question(s)below

question 58

Multiple Choice

Use the table for the question(s) below.
Consider the following investment alternatives:
-Which alternative offers you the highest effective rate of return?

• A)Investment A
• B)Investment B
• C)Investment C
• D)Investment D

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Definitions:

Availability Heuristic

The tendency to judge the probability of a type of event by how easy it is to think of examples or instances.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Event

An occurrence or happening, especially one of significance, that can be observed or participated in.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.