Question 1

________ is the tendency to treat money differently depending on how it is acquired and the psychological category to which it is attached.

Accepted Answer

A)  Money categorization 
B)  Risk categorization 
C)  Sunk cost accounting 
D)  Mental accounting

Question 2

Ella just started her first job and wants to be thoughtful about planning for retirement. She visits a financial planner for the first time. What advice is this planner likely to give Ella?

Accepted Answer

A)  buy shares in mutual funds that invest in a broad range of companies 
B)  start by buying real estate because it is a safe investment 
C)  wait to begin investing until you are more settled in work life 
D)  stick to one kind of asset so you can maximize your payoffs

Question 3

As a benevolent CEO, Min wants her employees to reap great financial benefits from working at her company. After consulting with a specialist in investor behavior, Min makes the wise choice of

Accepted Answer

A)  offering her employees a diverse but small number of options for their 401(k)s. 
B)  offering retirement funding in the form of poker chips that they can play at a local casino. 
C)  offering her employees every possible fund from which to choose for their 401(k)s. 
D)  deciding on her employees' behalves which funds they should invest in for their 401(k)s.

Question 4

Describe three things a young person should consider when planning his or her financial future.

Accepted Answer

The answer of Describe three things a young person should...

Question 5

Risk aversion is the

Accepted Answer

A)  general human tendency to stay away from activities that are dangerous, even if they may be fun. 
B)  reluctance to choose an uncertain option that, on average, pays better than the certain payoff of a second option. 
C)  reluctance to enter into any transaction in which the outcome is not known with certainty. 
D)  tendency to seek out activities that are mildly dangerous but thrilling.

Exam 16: Application Module- Social Psychology and Personal Finance

________ is the tendency to treat money differently depending on how it is acquired and the psychological category to which it is attached.

Ella just started her first job and wants to be thoughtful about planning for retirement. She visits a financial planner for the first time. What advice is this planner likely to give Ella?

As a benevolent CEO, Min wants her employees to reap great financial benefits from working at her company. After consulting with a specialist in investor behavior, Min makes the wise choice of

Describe three things a young person should consider when planning his or her financial future.

Risk aversion is the