Lily Wants to Invest in the Stock Market

question 30

Multiple Choice

Lily wants to invest in the stock market.She notices that the share price for Widgets Inc.has been falling for weeks.She chooses to invest in Widgets Inc.because she assumes it is due for a rebound.Lily suffers from

• A) The hot-hand fallacy
• B) The gambler's fallacy
• C) Irrational exuberance
• D) The sunk cost fallacy

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Definitions:

Encoder

A device or program that converts information from one format or code to another, often used for data encoding or signal processing.

Hierarchy of Effects

A sequence of stages through which consumers typically move from awareness to knowledge, liking, preference, conviction, and finally to purchase.

First Stage

The initial phase of a process or series of events, often characterized by early development or the introduction of something new.

Interest

The cost of borrowing money or the payment received for lending money, typically expressed as a percentage of the principal amount.