The tendency of naive investors to buy high (after prices have risen for several periods) and sell low (after prices have dropped for several periods) can be explained by the behavioral tendency known as
A) anchoring.
B) overconfidence.
C) familiarity bias.
D) loss aversion.
Answer: A
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When revenue is earned before the receipt of cash, an adjustment that increases a receivable and decreases a liability account is recorded
a. True b. False Indicate whether the statement is true or false
Companies can and often do use different costing methods for financial reporting and tax reporting. An exception to this is the:
A. LIFO conformity rule. B. Full disclosure principle. C. Consistency concept. D. Matching principle. E. FIFO inventory valuation method.
A reversing entry is ________
A) a journal entry used to close the temporary accounts after preparation of financial statements B) a special journal entry used to make the adjustments that took place after preparing the trial balance C) a special journal entry that eases the burden of accounting for transactions in the next period D) a journal entry prepared at the end of an accounting period to match assets with liabilities
Net income is not cash flow
Indicate whether the statement is true or false.