A Friend of Yours Recommends a Stock Based Upon a "Hot

question 68

Multiple Choice

A friend of yours recommends a stock based upon a "hot tip." You purchase it, and it subsequently declines the following year. Your friend advises you to purchases more at the lower price, despite clear evidence that this is not a sound company. Your friend is displaying which cognitive bias?

• A) escalation of commitment
• B) cognitive dissonance
• C) frequency
• D) projection

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Definitions:

Collectivism

A cultural value that emphasizes the importance of groups and collective action over individual achievement or identity.

In-Group Goals

Refer to the objectives or targets shared within a specific group of individuals who identify closely with each other.

Collectivism

A cultural value or social outlook emphasizing the importance of groups and collective action over individual goals and achievements.

In-Group Goals

Objectives or targets shared by members of a group that identify with each other and perceive themselves as part of the same group.