The Illusion That Uncontrollable Events Are Correlated with Our Actions

question 6

Multiple Choice

The illusion that uncontrollable events are correlated with our actions is facilitated by a phenomenon known as

• A) regression toward the mean.
• B) the correlation coefficient.
• C) the normal curve.
• D) the standard deviation.

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Definitions:

Student Loans

Borrowed money that is used to pay for educational expenses and is expected to be paid back with interest.

Discount Rate

The rate of interest applied to loans provided to commercial banks and other financial institutions by the Federal Reserve through its discount window.

Present Value

The contemporary valuation of a sum of money to be received in the future, or of ongoing cash flows, based on an agreed upon return rate.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.