Asked by Prabhjot Bansal on May 04, 2024
Verified
Confirmation bias is best defined as:
A) The area of finance dealing with the implications of reasoning errors on financial decisions.
B) The belief that your abilities are better than they really are.
C) Taking an overly optimistic view of potential outcomes
D) Searching for (and giving more weight to) information and opinion that confirms what you believe rather than information and opinion to the contrary.
E) The tendency of individuals to make different (and potentially inconsistent) decisions depending on how a question or problem is framed.
Confirmation Bias
The predisposition towards identifying, understanding, prioritizing, and retaining info that supports and confirms preconceived notions or assumptions.
Reasoning Errors
Reasoning errors are mistakes or flaws in the logical process used to deduce or infer conclusions, often leading to inaccurate judgments or assessments.
Financial Decisions
Choices made by individuals or businesses related to investments, budgeting, savings, and spending that affect financial health and goals.
- Comprehend various concepts of behavioral finance, such as biases and heuristics.
Verified Answer
DB
Diana BeltranMay 08, 2024
Final Answer :
D
Explanation :
Confirmation bias refers to the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.
Learning Objectives
- Comprehend various concepts of behavioral finance, such as biases and heuristics.