Chapter 2: Financial Attitudes and Behaviors Quiz

1 point(s)

Which cognitive bias refers to the tendency to avoid losses rather than acquiring equivalent gains?

Loss Aversion

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Confirmation Bias

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Herd Mentality

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Present Bias

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1 point(s)

What is an example of the Endowment Effect?

Selling an item at market price

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Buying a stock everyone else is buying

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Holding onto a car because you own it

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Avoiding an immediate reward for a future benefit

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1 point(s)

Which strategy helps mitigate the impact of cognitive biases in investment decisions?

Relying on gut feelings

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Following trends without research

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Diversifying investments

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Ignoring financial news

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1 point(s)

Societal norms have no impact on individual financial decision-making.

True

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False

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1 point(s)

Mental accounting refers to treating money differently based on its source or intended use.

True

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False

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3 point(s)

Definition

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Systematic deviation from rational judgment affecting decisions
Shared standards influencing behavior within a society
Fundamental beliefs and priorities guiding financial choices

Cognitive Bias

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Societal Norm

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Financial Value

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3 point(s)

Definition

Sort elements

Holding onto a losing stock hoping it will recover
Buying a stock because everyone else is
Focusing only on positive reviews of a desired purchase

Loss Aversion

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Herd Mentality

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Confirmation Bias

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1 point(s)

Arrange these steps in the correct order to mitigate cognitive biases: Recognize the bias, Seek objective advice, Diversify investments, Set up automatic rebalancing. (put the first step at the top)

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1 point(s)

Rank the following influences from most impactful to least impactful on financial behaviors: Personal Values, Societal Norms, Cognitive Biases, External Influences. (put the most impactful at the top)

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1 point(s)

How can recognizing and understanding cognitive biases improve your financial decision-making?

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1 point(s)

Describe a personal or societal value that has influenced your financial decisions and provide an example of its impact.

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Chapter 2: Financial Attitudes and Behaviors Quiz