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Homework answers / question archive / A) Which of the following statements best describes the availability bias? An investor: a
A) Which of the following statements best describes the availability bias? An investor:
a. only notices information that agress with their perception or beliefs
b. associates new information with an easilyh recalled past event
c. bases a decision on how the information is presented
B) Which of the following is the best course of action to reduce the overconfidence bias?
a. Keep detailed records of trades developing a track record of performance relative of strategy determining when strategy led to success as compared to luck
b. Increase the confidence interval of forecasts since overconfidence tends to lead to confidence intervals that are too narrow
c. Seek the opinions of others to find contrary viewpoints allowing for further scrutiny of predictions
A. Availability bias will be dependent upon The easiness of availability of informations and making decisions based on it so it will be associated new information with the easily record fast informations.
All the other statements are false.
Correct answer is option (B) Associates new information with easily record past events
B. Overconfidence bias is always associated with making decisions without appropriate rationality and believing that self decision making is the best decision making and others do not have adequate information so one should be trying to seek opinion of others to find contrary view points.
All the other statements are false.
Correct answer will be option (C) Seek the opinion of others to find contrary viewpoints allowing for further scrutiny after predictions.
