Megan Cannot Sleep at Night Because She Is Terribly Worried

question 7

Multiple Choice

Megan cannot sleep at night because she is terribly worried about being robbed, which is highly unlikely. As her friend, you want to help her by describing judgment errors and why she should not lose anymore sleep. Which concept is NOT contributing to her irrational fear?

• A) base rates for getting robbed
• B) availability heuristic for people getting robbed
• C) memory bias for extreme events
• D) sample size neglect for the number of robbers out there

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Definitions:

Ownership Interest

Indicates an individual's or entity's legal rights and stakes in a company or property.

Consolidated Stockholders' Equity

The total equity in a conglomerate of all the shareholders combined, as if the conglomerate and its subsidiaries were a single entity.

Investment Income

Income received from investment assets, including dividends, interest, and capital gains.

Book Value

The amount of value remaining in a company's assets, after accounting for depreciation and amortization, that shareholders would theoretically receive if assets were liquidated.