Behavioral Biases — Practice Questions

Behavioral BiasesMoney Psychology and Fraud — The mental shortcuts that lead to bad money decisions.Your brain uses mental shortcuts to make fast decisions. They are useful for survival but can quietly sabotage your money choices.

Loss aversion: losses hurt more than equal gains feel good.

Anchoring: leaning on the first number you see, like a high 'original' price.

Present bias: overvaluing rewards now versus larger rewards later.

Sunk cost fallacy: sticking with something because of what you already spent.

Herd and confirmationHerd behavior is buying because everyone else is, which inflates bubbles. Confirmation bias is seeking only evidence that agrees with you, which breeds overconfidence.The simplest defense is a waiting period and rules set in advance, like automatic saving, that take in the moment emotion out of it.12 practice questions with explanations. Free, and no account is needed to start.