Cognitive Bias Review

What does FOMO stand for?

• Financial Obligation and Money Options

• Fear of Missing Out

• Financial Operations Management

• Focusing on Money Objectives

What percentage of people make purchases due to FOMO?

• 20%

• 40%

• 60%

• 80%

Which of the following best describes a cognitive bias?

• A logical process used to make financial decisions

• A systematic error in thinking that influences decisions and judgments

• A method of accurately predicting future market trends

• A step-by-step decision-making model for budgeting

Which cognitive bias causes someone to stick with a decision because they’ve already invested too much?

• Overconfidence

• Sunk Cost Fallacy

• Loss Aversion

• Herd Mentality

Which cognitive bias might lead you to avoid risks to prevent losing money?

• Overconfidence

• Loss Aversion

What is the first step to overcoming cognitive biases?

• Ignoring them

• Blaming others

• Being aware of them

• Continuing with existing habits

Which cognitive bias is present when someone follows others’ actions without thinking?

• Herd Mentality

• Loss Aversion

• Overconfidence

• Sunk Cost Fallacy

FOMO can influence people to make purchases they might not otherwise make.

• True

• False

Cognitive biases never impact financial decisions.

• True

• False

What is Confirmation Bias?

• Seeking out only information that confirms your existing beliefs

• Blaming others for financial mistakes

• Spending money based on others’ actions