Financial Psychology

Question 1

A leading response will often provoke a ________.

Answer 1

More detailed answer.

Question 2

How do individuals with kinesthetic learning styles prefer to have information presented to them?

Answer 2

In bullet point format.

Question 3

What is it called when a client that wishes to include personal, spiritual, and emotional goals into their financial plan?

Answer 3

Values driven planning.

Question 4

Buying a security because it dropped and “must” go back up in value reflects what type of bias?

Answer 4

Anchoring.

Question 5

Someone who overspends, has high levels of credit card debt, and could be classified as a workaholic, would follow which money-script?

Answer 5

Money worship.

Question 6

Overinvestment in companies a client “knows” is what bias?

Answer 6

Familiarity.

Question 7

Overconfidence leads to ________?

Answer 7

Overtrading.

Question 8

“it’s fallen so much that it must go back up in value” reflects what type of bias?

Answer 8

Anchoring.

Question 9

What approach assumes a client is rational and will change behavior if given counseling?

Answer 9

The economic resource approach.

Question 10

In behavioral financial, cognitive dissonance is a result of ________?

Answer 10

Over confidence.

Question 11

A planning that views themselves as a consultant takes what type of approach?

Answer 11

The strategic management approach.

Question 12

What are the 4 categories or general communication?

Answer 12

• *Mas**s.
• *Intrape**rsonal.
• *Interpe**rsonal.
• *Gro**up.

Question 13

Which approach uses the SWOT analysis?

Answer 13

Strategic management approach.

Question 14

What are intrapersonal skills?

Answer 14

• *A** form of self-communication.
• *Th**is is the dialog a client has with themselves.

Question 15

What’s it called when an asset feels “special” to a client, and they have sentimental feelings about the holding?

Answer 15

Endowment bias.

Question 16

When a client is unable to objectively review and analyze new information?

Answer 16

Anchoring.

Question 17

When a client disregards accurate, but unsupportive information, this is a sign of ________?

Answer 17

Confirmation bias.

Question 18

Attitudes, believes, and values all fall in line with which approach?

Answer 18

The cognitive behavior approach.

Question 19

In prospect theory, investors are more concerned with ________.

Answer 19

Avoiding losses than achieving gains.

Question 20

A client that places different values on comparable entities based on different situations is exhibiting ________.

Answer 20

Mental accounting.

Question 21

A client who tries not to think about money and believe they do not deserve money, falls into which money-script?

Answer 21

Money avoidance.

Question 22

A client that purchases items in an effort to create happiness falls into which money-script?

Answer 22

Money worship.

Question 23

Which types of learners tend to communicate with facial expressions?

Answer 23

Visual learners.

Question 24

What is it called when someone will not change their view when they are presented with new information that is contradictory to their views?

Answer 24

Belief preservation.

Question 25

Someone who believes that rich people get rich by taking advantage of other people, fall into which money-script?

Answer 25

Money avoidance.

Question 26

Hindsight bias and cognitive dissonance are both a type of _________?

Answer 26

Overconfidence.

Question 27

Someone who doesn’t look at statements, does not have a budget, and is in financial denial, falls into which money script?

Answer 27

Money avoidance.