According to Your Textbook,what Is One Reason Why People Tend

question 6

Multiple Choice

According to your textbook,what is one reason why people tend to make poor investing decisions,such as selling a stock immediately after it has lost a significant amount of value?

• A)People tend to be place more value on money lost than on money gained,a bias known as loss aversion.
• B)The new value of the stock serves as an anchor,which causes the investor to think the stock is worth less than it really is.
• C)Investing strategies form a mental set,which interferes with the investors adjusting to the new value of the stock.
• D)The availability heuristic leads the investors to sell the stock so they can increase the availability of money to reinvest.

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Definitions:

TAT

Thematic Apperception Test, a projective psychological test that involves creating stories about ambiguous scenes and images to uncover underlying thoughts and feelings.

Objective Tests

Tests designed to measure an individual's performance without subjective judgment, often featuring standardized questions and answer choices.

Psychoanalysis

A therapeutic approach founded by Sigmund Freud that aims to explore unconscious desires and conflicts as they manifest in behavior and mental disorders.

TAT

Thematic Apperception Test, a projective psychological test used to reveal a person's social drives or needs by their interpretation of a series of pictures of ambiguous scenes.