Stockbrokers Often Believe That Their Own Expertise Will Enable Them

question 122

Multiple Choice

Stockbrokers often believe that their own expertise will enable them to select stocks that will outperform the market average.This belief best illustrates

• A) a fixation.
• B) the framing effect.
• C) the availability heuristic.
• D) overconfidence.

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Definitions:

Asset Account

An account on a balance sheet representing the resources owned by a company, with future economic benefit.

Unearned Revenue

Revenue received by a company for goods or services that are yet to be delivered or performed.

Cash

The most liquid form of assets, representing currency or assets that can be immediately turned into currency.

Prepaid Expense

An expense that is paid for in advance and recorded as an asset until it is actually incurred.