Overconfidence Refers to the Tendency to

question 168

Multiple Choice

Overconfidence refers to the tendency to

• A) cling to our initial beliefs,even though they have been proven wrong.
• B) search for information that supports our preconceptions.
• C) underestimate the extent to which our beliefs and judgments are wrong.
• D) judge the likelihood of an event based on its availability in memory.

---

Definitions:

Discounted Note

A promissory note sold for less than its face value, which will be worth its full value upon maturity; used as a form of short-term financing.

Interest Expense

This is the cost incurred by an entity for borrowed funds, reflected as an expense on the income statement.

Adjusting Entry

A record entered at the conclusion of an accounting cycle to assign revenues and expenses to the appropriate period.

Discounted Note

A promissory note, or loan agreement, where the interest is deducted from the principal amount at the time the loan is issued.