FHCE 3200, Exam Review Questions and answers/| Questions with 100% Correct Answers | Verified | Latest Update.
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FHCE
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FHCE
FHCE 3200, Exam Review Questions and
answers/
b) how well an individual can manage their finances based on their access to financial resources - -
financial capacity can be defined as
a) how well an individual understands financial information
b) how well an individual can manage their financ...
FHCE 3200 , Exam Review Questions and answers/ b) how well an individual can manage their finances based on their access to financial resources - ✅✅ -
financial capacity can be defined as a) how well an individual understands financial information b) how wel l an individual can manage their finances based on their access to financial resources c) how well an individual understands accounting d) how well an individual can manage their finances based on their personality and psychology d) financial risk toleran ce - ✅✅ -an individual's willingness to engage in a risky financial behavior is known as their a) financial risk capacity b) financial risk efficacy c) financial risk awareness d) financial risk tolerance d) all of the above - ✅✅ -Which of the following fac tors is not associated with an individual's financial risk tolerance? a) educational attainment b) gender c) wealth d) all of the above are associated with risk tolerance d) optimism bias - ✅✅ -Many people make the mistake of believing that they will never experience painful loss. This mental fallacy is also known as a) loss aversion b) confirmatory bias c) status quo bias d) optimism bias c) status quo bias - ✅✅ -a preference for leaving things as they are is known as a) loss aversion b) physical inertia c) status quo bias d) negative momentum b) designating a default option that generally leads to good outcomes - ✅✅ -People's propensity to procrastinate on financial decisions can ironically be used to their benefit. Which of the following exemplifies this effect? a) Giving them numerous choices when they are trying to make a decision b) designating a default option that generally leads to good outcomes c) giving them complex puzzles to solve before they make the decision d) all of the above a) future ori entation - ✅✅ -People with a _____________ tend to prefer spending less money today and save more for the future a) future orientation b) present orientation c) status quo bias d) high risk tolerance b) despite large temporary fluctuations, over time peopl e tend to revert to a baseline level of happiness - ✅✅ -Which of the following best describes the concept of the hedonic treadmill? a) it takes constant work to maintain even a minimal baseline of happiness b) despite large temporary fluctuations, over time people tend to revert to a baseline level of happiness c) happiness has inertia: happy people tend to become happier while sad people tend to become sadder d) people who must work to meet their basic needs are the happiest a) Money can buy happiness, so long as people focus their spending on luxury cars... - ✅✅ -All of the following are true regarding the relationship of money and happiness EXCEPT... a) money can buy happiness, so long as people focus on spending on luxury cars, large homes, and other cons umer goods b) spending money on certain kinds of expenses (such as gifts and vacations) tends to increase happiness more than spending on other kinds of expenses (such as TV and rent) c) happiness tends to increase with income until people earn around $70,000 per year... further increase in income do not tend to product additional happiness d) all the above are true c) the typical person suffers from a host of biases that reduce invest ment returns to less than half of the typical market return - ✅✅ -How does the psychology of the typical person affect investment returns? a) while some people are panicky investors, the typical person actually gets investment returns near the market averag e b) the typical person does tend to "buy high and sell low" but this tendency only costs them a little bit off the typical market return
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