Imagine You Are a Very Shy Person

question 19

Multiple Choice

Imagine you are a very shy person. You meet someone new and judge that person to be extremely loud and extraverted. Your friend, who tends to be loud and boisterous, judges that same new person to be rather quiet and reserved. These judgments are likely an example of which of the following?

• A) Correspondence bias
• B) Anchoring and adjustment
• C) Mental simulation
• D) None of the above

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Definitions:

Amortization Assumption

The accounting practice of gradually writing off the initial cost of an intangible asset over its useful life.

Interest Expense

The cost incurred by an entity for borrowed funds; interest payments made on any form of debt over a given period.

Effective Interest Method

An accounting practice used to allocate loan discounts or premiums over the life of the loan, reflecting the financial interest rate more accurately.

Discount Amortization

The process of gradually reducing the discount on bonds payable or notes payable over the life of the debt.