Individuals tend to have a negative reaction to losing an amount of money-a reaction that is stronger in magnitude than the positive reaction associated with gaining the same amount of money. This is referred to as

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This phenomenon is known as loss aversion, where individuals are more sensitive to losses than gains. It can lead to risk-averse behavior in financial decision making. A is incorrect because risk tolerance refers to an individual's ability to handle risk, not their reaction to gains or losses. B is incorrect because market irrationality refers to a wider range of market behaviors beyond just loss aversion. D is also incorrect as risk avoidance is a general term for avoiding risk in any form, not specifically related to the phenomenon of loss aversion.

Individuals Tend to Have a Negative Reaction to Losing an Amount