Financial Math Topic 2 Practice Test

Which of the following cognitive biases is described in the scenario?

• Fear of Missing Out

• Endowment Effect

• Loss Aversion

• no cognitive bias

Which of the following cognitive biases is described in the scenario?

• Fear of Missing Out

• Endowment Effect

• Loss Aversion

• no cognitive bias

Which of the following cognitive biases is described in the scenario?

• Fear of Missing Out

• Endowment Effect

• Loss Aversion

• no cognitive bias

Which of the following cognitive biases is described in the scenario?

• Fear of Missing Out

• Endowment Effect

• Loss Aversion

• no cognitive bias

Choose the word defined as: "the tendency for people to follow the actions of the masses."

• opportunity cost

• loss aversion

• social proof

• overconfidence bias

Choose the word defined as: "the phenomenon where people see a potential loss as more severe than the possibility of an equivalent gain."

• opportunity cost

• loss aversion

• social proof

• overconfidence bias

Choose the word defined as: "the tendency people have to be more confident in their own abilities when compared to others."

• opportunity cost

• loss aversion

• social proof

• overconfidence bias

Choose the word defined as: "sacrificing monetary efforts to offer free/promotional products."

• opportunity cost

• loss aversion

• social proof

• overconfidence bias

Using the supply and demand curves on the graph, what will happen if the price of the product is set at $11.00?

• equilibrium

• shortage, prices will be driven up

• surplus, prices will be driven down

• shortage, prices will be driven down

Using the supply and demand curves on the graph, which of the following will NOT happen if the price of the product is set at $8.00?

• prices will be driven down

• shortage

• prices will be driven up

• demand will be greater than supply