Amy has been investing in stocks so she can accumulate sufficient money to purchase her own home. These savings are currently valued at $82,500. As recently as last month, her savings were
Worth in excess of $110,000. Today, Amy found the perfect house. She knows she can withdraw her
Savings to pay on this house and borrow the remaining balance from her father at zero percent
Interest. However, Amy is refusing now to buy any house until her savings increase in value back to
Their $110,000 previous valuation. Amy is displaying which one of the following behaviors?
A) Representativeness heuristic.
B) Loss aversion.
C) House money effect.
D) Under-confidence.
E) Confirmation bias.
Correct Answer:
Verified
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