A sales representative from an investment company is trying to convince a young couple to invest in one of the company's mutual funds. Which of the following will most increase his likelihood of success, based on the framing effect?

Question

Quizplus · Accepted Answer

The framing effect suggests that people tend to react differently to the same information depending on how it is presented to them. In this case, stressing that the fund has had solid returns in 12 of the past 15 years presents the information in a positive light, which may be more compelling to the young couple than leaving a detailed prospectus or mentioning the names of other investors. Option B could also work, but emphasizing positive returns is typically more effective than emphasizing infrequent losses.

A Sales Representative from an Investment Company Is Trying to Convince