Carl holds a large position in Stock X that was recently downgraded. Carl's advisor recommends he sell X and take his gain, which was accumulated over the past several years. However, Carl decides not to sell X. Carl's behavior best represents:
A) the house-money effect.
B) representativeness bias.
C) loss aversion.
D) the endowment effect.

Question

Quizplus · Accepted Answer

The Answer of Carl holds a large position in Stock X that was recently downgraded. Carl's advisor recommends he sell X and take his gain, which was accumulated over the past several years. However, Carl decides not to sell X. Carl's behavior best represents:
A) the house-money effect.
B) representativeness bias.
C) loss aversion.
D) the endowment effect.

Carl Holds a Large Position in Stock X That Was