Sam,an avid day trader,has noticed that a particular stock has increased in value in each of the last three trading days.Given this trend,he believes the stock price will increase over the next two trading days.This is an example of
A)a timing decision.
B)irrational exuberance.
C)representativeness.
D)conservatism.
E)arbitrage.

Question

Quizplus · Accepted Answer

Sam's belief is an example of representativeness, where he assumes that a short-term trend will continue into the future based on a small sample size, without considering other factors that might affect the stock's price.

Sam,an Avid Day Trader,has Noticed That a Particular Stock Has