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

This is an example of representativeness, where Sam is assuming that the recent trend of stock price increases will continue, based on a small sample of past performance.

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