FINA4352 GP CHAPTER 2 KEY TERMS EXAM QUESTIONS AND
VERIFIED ANSWERS GRADED A++
active listening
paying full attention to what their clients are saying and responding by paraphrasing the
clients' comments
affinity bias
the tendency to make decisions based on how individuals believe the outcomes will
represent their interests and values
anchoring
individuals making irrational decisions based on information that should have no
influence on the decisions at hand
attitudes
reflect a person's opinions, values, and wants
auditory learning style
retain information by hearing or speaking
behavioral finance
a field of study that relates behavioral and cognitive psychology to financial planning
and economics in an attempt to understand why people act irrationally during the
financial decision-making process
beliefs
, a type of attitude because they reveal the understanding of some aspect of a person's
life
body language
involves facial expressions, eye contact, gestures, and body posture; it actually impacts
how clients receive messages more than any other type of communication
closed-ended questions
the types of questions that limit data gathering because they only require a "yes" or "no"
answer
cognitive dissonance
mental discomfort when newly acquired information conflicts with pre-existing
understanding
cognitive errors
decision-making based on well-known concepts that may or may not be correct
confirmation bias
when individuals look for new information or distort new information to support an
existing view
conservatism bias
when individuals initially form a rational view but fail to change that view as new
information becomes available
context
includes past history or any conditions that presently exist
emotional biases
VERIFIED ANSWERS GRADED A++
active listening
paying full attention to what their clients are saying and responding by paraphrasing the
clients' comments
affinity bias
the tendency to make decisions based on how individuals believe the outcomes will
represent their interests and values
anchoring
individuals making irrational decisions based on information that should have no
influence on the decisions at hand
attitudes
reflect a person's opinions, values, and wants
auditory learning style
retain information by hearing or speaking
behavioral finance
a field of study that relates behavioral and cognitive psychology to financial planning
and economics in an attempt to understand why people act irrationally during the
financial decision-making process
beliefs
, a type of attitude because they reveal the understanding of some aspect of a person's
life
body language
involves facial expressions, eye contact, gestures, and body posture; it actually impacts
how clients receive messages more than any other type of communication
closed-ended questions
the types of questions that limit data gathering because they only require a "yes" or "no"
answer
cognitive dissonance
mental discomfort when newly acquired information conflicts with pre-existing
understanding
cognitive errors
decision-making based on well-known concepts that may or may not be correct
confirmation bias
when individuals look for new information or distort new information to support an
existing view
conservatism bias
when individuals initially form a rational view but fail to change that view as new
information becomes available
context
includes past history or any conditions that presently exist
emotional biases
