Behavioral psychologists Kahneman and Tversky developed prospect theory, which d

Question

Behavioral psychologists Kahneman and Tversky developed prospect theory, which describes individual behavior in the face of risky situations where there are prospects of gains and losses. Which of the following are elements of prospect theory? More than one answer may be correct. To earn full credit, you must select all of the correct answers and none of the incorrect answers O Individuals make decisions based on the likely effect of those choices on the person's ending wealth for a target holding period. People's choices are motivated by the values that they assign to gains and and the values that they assign to losses. Losses are considered far more undesirable than equivalent gains. The language used to present the possible gains and losses will influence the final decision that is made.

Explanation / Answer

Asnwer (b) People's choices are motivalted by the values that they assign to gains and losses

(c) Losses are considered far more undesriable than Losses

(d) The langugae will play a role in making decesions

(a) is not correct since people are not rational to make decesions based on thier ending wealth

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