Kate tends to hold onto assets that have lost value in the hope that their values will increase in the future. Kate illustrates which one of the following?
A) Frame dependence
B) Self-attribution bias
C) Gambler's fallacy
D) Break-even effect
E) Regret aversion

Question

Quizplus · Accepted Answer

Kate's behavior exemplifies the break-even effect, which is the tendency to hold onto losing investments or assets in the hopes of recouping losses. This behavior is often driven by the desire to break even, rather than by rational investment decisions.

Kate Tends to Hold onto Assets That Have Lost Value