Chapter 2 Overconfidence

Chapter 2 Overconfidence 1) What is the name given to the tendency to be too sure that our judgments and decisions are accurate? a. Overprecision b. Overestimation c. Overplacement d. Overjustification Ans: a Response: p. 15 2) What is the name given to the tendency to think we are better than we actually are? a. Overprecision b. Overestimation c. Overplacement d. Overjustification Ans: b Response: p. 15 3) What is the name given to the tendency to falsely think we rank higher than others on certain dimensions? a. Overprecision b. Overestimation c. Overplacement d. Overjustification Ans: c Response: p. 15 4) In what ways is it beneficial to outwardly express confidence? a. People feel better about themselves. b. People perform better because they face a lot of pressure to justify their confident predictions. c. People are more persuasive and capable of attaining status when they portray confidence. d. The outward expression of confidence is not beneficial. Ans: c Response: p. 19-20 5) Which of the following is a common mistake made by investors? a. They don’t invest enough money. b. They trade too often. c. They take on too much risk in their portfolios. d. They don’t correctly time the market. Ans: c Response: p. 21-22 6) When are we the most likely to overplace our performance relative to others? a. When we are in a good mood. b. When we are trying to impress others. c. When we are working on an easy task. d. None of the above. Ans: c Response: p. 26-27 True / False 7) Overconfidence is so robust that research has failed to identify situations in which we are likely to be underconfident. Ans: False Response: p. 26 8) People tend to overestimate their control in situations where they have objectively little control. Ans: True Response: p. 23 9) There are advantages to having positive illusions. Ans: True Response: p. 28