Which of the following cognitive biases in finance suggests that the majority of people perceive a dividend dollar differently from a capital gains dollar?
A) Mental accounting
B) Biased expectations
C) Reference dependence
D) Representativeness heuristic:

Question

Quizplus · Accepted Answer

Mental accounting refers to the tendency of people to separate their money into different categories based on subjective criteria, such as the source of the money or the purpose of the money. One aspect of mental accounting is the perception that dividend dollars are somehow different from capital gains dollars, even though they are both ultimately a form of return on investment. This bias can lead investors to make suboptimal decisions based on their categorization of the money.

Which of the Following Cognitive Biases in Finance Suggests That