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  3. 3. discuss your reaction for the following framing

3. Discuss your reaction for the following framing bias scenarios Question 1: Suppose that you...

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Finance

3. Discuss your reaction for the following framing bias scenarios

Question 1: Suppose that you have the opportunity to invest in a mutual fund called MicroTrend. Over the past 10 years, MicroTrend has had an average annual return of 6 percent, with a standard deviation of 10 percent. So if MicroTrend continues to perform consistently, you can expect two-thirds of all returns to fall between 4 percent and 16 percent.

How comfortable would you feel about investing in MicroTrend? a. Comfortable

b. Somewhat comfortable c. Uncomfortable

Question 2: Suppose that you have the opportunity to invest in a fund called MicroTrend. Over the past 10 years, MicroTrend has had an average annual return of 6 percent, with a standard deviation of 10 percent. So if MicroTrend continues to perform consistently, you can expect 95 percent of all returns to fall between 14 percent and 26 percent. How comfortable would you feel about investing in MicroTrend?

a. Comfortable b. Somewhat comfortable c. Uncomfortable

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