Top Posters
Since Sunday
6
y
2
m
2
m
2
u
2
m
2
B
2
M
2
e
2
k
2
N
2
y
2
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
Tidy Tidy
wrote...
Go to Answer
Posts: 4852
Rep: 38 0
9 years ago
Wilbur Rickhiser, a financial advisor, recently told one of his clients: "The biggest mistake you can make is to hold onto a stock for too long in order to avoid a loss. Let's say you bought a stock for $50 per share but that six months later the price fell to $40 after a poor earnings report. Many of my clients in this situation will hold the stock, hoping the price will later rise above $50. In most cases like this the price does not rise and may even fall. You must know when to cut your losses." Which of the following is the best explanation for Rickhiser's advice?
A) People sometimes buy stocks because other people are buying them or they want to appear to be fashionable.
B) People sometimes make mistakes when they buy stocks because of the endowment effect.
C) People sometimes make mistakes when they buy stocks or when they buy goods and services: they ignore the monetary opportunity costs of their choices.
D) People often fail to ignore the sunk costs of their decisions. The cost of the stock bought at $50 per share is a sunk cost.
Textbook 
Essentials of Economics

Essentials of Economics


Edition: 4th
Authors:
Read 1021 times
2 Replies
Repeat after me: 'Calm down. Things are gonna be fine. Things are gonna be all great. Just relax.' Wink Face
Replies
Answer verified by a subject expert
Chimelo46Chimelo46
wrote...
#1
Top Poster
Posts: 5641
Rep: 449 0
9 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

wrote...
#2
9 years ago
It was nothing, thanks for updating us.
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  425 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 1066
  
 400
  
 798
Your Opinion
Who will win the 2024 president election?
Votes: 119
Closes: November 4
Previous poll results: Which of the following is the best resource to supplement your studies: