Brain

Question 1

Errors in financial judgement

Answer 1

Bias

Question 2

Statistical, info or memory errors. Result from subconscious mental procedures for processing info.

Answer 2

Cognitive bias

Question 3

Illogical or distorted reasoning, difficult to correct

Answer 3

Emotional bias

Question 4

Overestimate predictive abilities

Answer 4

Overconfidence
C

Question 5

Representativeness

Answer 5

C
Internal classification system

Question 6

Judging relatively vs absolute

Answer 6

Anchoring and adjustment
C

Question 7

Cognitive dissonance

Answer 7

Conflicts with pre existing beliefs, will go to great lengths to convince themselves they have made the right decision
C

Question 8

Ppl to estimate probability of outcome based on how prevalent it is in their lives

Answer 8

Availability
C

Question 9

Self-attribution

Answer 9

Ascribing successes to own hard work or ability and their failures to outside factors
C

Question 10

Illusion of control

Answer 10

Thinking they can control random outcomes
C

Question 11

Conservatisim

Answer 11

Hold onto belief and do not update
C

Question 12

Ambiguity aversion

Answer 12

Avoid risk whn probability distributions seem uncertain
C

Question 13

Mental accounting

Answer 13

Tendency to categorize and evaluate outcomes by grouping assets into non tangible mental accounts
C

Question 14

Confirmation

Answer 14

tendency to search confirming prior belief
C

Question 15

Hindsight

Answer 15

After outcome, ppl think it was predictable even though it was not
C

Question 16

Recency bias

Answer 16

Greater importance to recent event
C

Question 17

Sunk cost

Answer 17

Continue invest or spend despite new evidence shows expected cost of doing so exceeds benefit
C

Question 18

Framing

Answer 18

Respond to various situations differently depending on the context
C

Question 19

Endowment

Answer 19

More value on asset they hold
E

Question 20

Self control

Answer 20

Money is most common
E

Question 21

Optimism

Answer 21

Ppl tend to think they surpass the population mean
E

Question 22

Loss aversion

Answer 22

Rather avoid losses than experience gains
E

Question 23

Regret aversion

Answer 23

Avoid making decision because they fear making mistake
E

Question 24

Dtatus quo

Answer 24

Stick with same when facing many options
E

Question 25

Affinity bias

Answer 25

Tendency to drawn ppl, things or decision that one vies as similar to themselves
E

Question 26

Disposition bias

Answer 26

Tendency to sell asset that accumulated in value and resist selling the asset that fallen
E

Question 27

Maslow’s hierarchy of needs

Answer 27

Transcendence (top of pyramid)
Self-Actualization
Aesthetic
Cognitive
Esteem
Belongingness/Social/Love
Safety
Physiological (base of pyramid)

Question 28

Men’s typical biases

Answer 28

Overconfidence C
Loss aversion bias E
Availability C
Cognitive dissonance bias C

Question 29

Women’s typical biases

Answer 29

Endowment bias E
Status quo bias E
Representative bias C
Regret aversion bias E