Question

question 4 of 14
which cognitive bias is exemplified by holding onto a declining stock to avoid realizing a loss?
select an answer from the options below.
a endowment effect
b herd mentality
c sunk cost fallacy

Explanation:

The sunk cost fallacy refers to the tendency to continue an endeavor (like holding a declining stock) because of previously invested resources (the money spent on the stock), to avoid the pain of realizing a loss. The endowment effect is valuing owned items more than non-owned ones, herd mentality is following others' actions, which do not match the described scenario.

Answer:

C. Sunk cost fallacy