Which of the following cognitive biases in finance suggests that people tend to judge Event A to be more probable than Event B when A appears more representative than

A) Mental accounting
B) Biased expectations
C) Reference dependence
D) Representativeness heuristic

Question

Which of the following cognitive biases in finance suggests that people tend to judge Event A to be more probable than Event B when A appears more representative than

A) Mental accounting
B) Biased expectations
C) Reference dependence
D) Representativeness heuristic

Quizplus · Accepted Answer

The representativeness heuristic in finance suggests that people tend to judge Event A to be more probable than Event B when A appears more representative than B. This means that people make judgments based on how well an event or situation matches their prototype, or their preconceived ideas or stereotypes about that event or situation.

Which of the Following Cognitive Biases in Finance Suggests That