Asked by Alayna Garcia on May 04, 2024
Verified
Which of the following best describe an unrealistic belief that things will work out well?
A) Overconfidence
B) Over-optimism
C) Over-precision
D) Overcorrection
Over-optimism
Over-optimism refers to the tendency of individuals to hold an unrealistically positive view of the future or the outcomes of events, which can affect decision-making processes.
Unrealistic Belief
A conviction or expectation that does not align with actual facts or evidence, often based on incorrect assumptions or misinformation.
- Recognize the impact of behavioral biases such as overconfidence, over-optimism, and over-precision on investor decisions and market phenomena like bubbles.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
B
Explanation :
Over-optimism is the unrealistic belief that things will work out well, regardless of the circumstances or evidence to the contrary. Overconfidence implies a belief in one's ability to succeed, which may or may not be unrealistic. Over-precision refers to excessive attention to detail, and overcorrection is a corrective action that goes too far and creates new problems.
Learning Objectives
- Recognize the impact of behavioral biases such as overconfidence, over-optimism, and over-precision on investor decisions and market phenomena like bubbles.