The last six times you purchased a stock you earned high returns within one year. Thus, you believe you will have the same result with your next stock purchase. This is an example of which one of the following?

Question

Quizplus · Accepted Answer

This is an example of recency bias, which is the tendency to rely too heavily on recent past events or experiences when making decisions or judgments. The belief that past success will continue in the future is based solely on the most recent experiences of high returns.

The Last Six Times You Purchased a Stock You Earned