Biases (definitions on front side)

Question 1

Make irrationally uneconomical consumer choices or investment decisions based on how you believe a certain product or service will reflect your values.

Answer 1

Affinity

Question 2

Occurs when investors are influenced by purchase points or arbitrary price levels and cling to these numbers as they decide whether to buy or sell an investment.

Answer 2

Anchoring

Question 3

A mental shortcut that causes people to estimate the probability of an outcome based on how prevalent or familiar that outcome appears in their lives.

Answer 3

Availability

Question 4

The mental discomfort we feel when newly acquired information conflicts with preexisting understandings.

Answer 4

Cognitive dissonance

Question 5

Cherry pick data to support a thesis, rather than objectively analyzing.

Answer 5

Confirmation

Question 6

Emphasize original information more than new information, underreact to new information, and ignore information that is not consistent with our own view of the world.

Answer 6

Conservatism

Question 7

Assign greater value to an object you possess and may lose than an object of the same value that you don?t possess and have the potential to gain.

Answer 7

Endowment

Question 8

Tendency to respond to situations differently based on the context in which a choice is presented.

Answer 8

Framing

Question 9

Buying when everyone else buys and/or when share price is rising, and vice versa.

Answer 9

Herding

Question 10

Tendency to view events as having been more predictable, and thus actions more correct or incorrect, than was apparent as the situation was unfolding, which gives a false sense of security and can lead to excessive risk-taking.

Answer 10

Hindsight

Question 11

Tendency to be more attracted to investments in domestic markets.

Answer 11

Home country

Question 12

Tendency to believe we can control or influence outcomes that we cannot.

Answer 12

Illusion of control

Question 13

Feeling greater pain for a loss than for a gain.

Answer 13

Loss aversion

Question 14

When people treat various sums of money differently based on where these sums are mentally categorized.

Answer 14

Mental accounting

Question 15

De-emphasize the events preceding the outcomes and over-emphasize the outcome, which results in the quality of the decision being judged solely on its eventual outcome.

Answer 15

Outcome

Question 16

Unwarranted faith in your own thoughts and abilities. The belief that you can control random events by acquiring more information and consider your abilities to be better than they actually are.

Answer 16

Overconfidence

Question 17

We recall recent information more easily than information obtained further in the past and potentially extrapolate recent patterns where none exist.

Answer 17

Recency

Question 18

The tendency to do nothing due to the fear of making the wrong decision, and the tendency to allow regret for a previous decision to affect future ones.

Answer 18

Regret aversion

Question 19

Arriving at a conclusion without doing a thorough analysis. Processing new information using pre-existing ideas or classic models.

Answer 19

Representativeness

Question 20

Take credit for good outcomes and pass on the blame for bad outcomes.

Answer 20

Self-attribution

Question 21

Tendency to consume today at the expense of saving for tomorrow.

Answer 21

Self-control

Question 22

Tendency to stay with current investments, faced with an array of options, select the one that keeps conditions the same.

Answer 22

Status quo