Nkeis Decides to Buy a Small Car Because It Is

question 174

Multiple Choice

Nkeis decides to buy a small car because it is good for the environment.When she goes to look at small cars,she is surprised that they come in luxury versions,because she expected them to be very basic and uncomfortable.Nkeis has been using:

• A) confirmation bias
• B) the framing effect
• C) the representativeness heuristic
• D) the availability heuristic

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Definitions:

Actual Return

The actual gain or loss on an investment, expressed as a percentage of the investment's initial cost.

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, often based on government bonds.

Forecasted Market Return

An estimate of the total return anticipated from a market or an investment over a specified future period.

T-Bill Rate

The yield on U.S. Treasury bills, which are short-term government securities, serving as a benchmark for short-term interest rates.