Over the past six months, you have watched as your parent's retirement savings have declined in value by 25 percent due to a severe financial market downturn. As a result, you have decided that you will never invest in stocks for your own retirement but will instead keep all of your money in an insured bank account. Which behavioral characteristic have you acquired as a result of the market downturn?

Question

Quizplus · Accepted Answer

Myopic loss aversion refers to the tendency for individuals to focus on short-term losses rather than long-term gains when making investment decisions. In this scenario, the individual has become fearful about investing in stocks because they have seen their parent's retirement savings decline in value. However, by focusing only on short-term losses and not considering the potential for long-term gains, they may be missing out on significant opportunities for growth and income in the future.

Over the Past Six Months, You Have Watched as Your