Portfolio exactly offsets the amount of extra taxes

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1. For each of the following cognitive biases, come up with at least one example

Confirmation bias.

Self-serving bias.

The overconfidence effect.

Hindsight bias.

The availability heuristic.

The planning fallacy.

Framing effects.

2. Suppose that Ike is loss averse. In the morning, Ike's stockbroker calls to tell him that he has gained $1,000 on his stock portfolio. In the evening, his accountant calls to tell him that he owes an extra $1,000 in taxes. At the end of the day, does Ike feel emotionally neutral since the dollar value of the gain in his stock portfolio exactly offsets the amount of extra taxes he has to pay? Explain

Reference no: EM131963596

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