Linda The Bank Teller Case Study

1. Why do most people get the wrong answer in the case of Linda the bank teller?
I find that people generally tend to solve this case under the optical illusion of C containing more information regarding Linda’s occupation thus they incline to perceive C as a more probable answer, given in this particular case of C stating two different statuses, thus wrongly claiming C to be the correct answer. There are lots of theoretical factors regarding the answer, such as her personality, age, or past and the hypotheses about the numbers of bank tellers in comparison to feminists, though one has to approach this with having the answers outlined as equally probable by exactly 1/3 regardless of how one description of Linda’s occupation is more detailed

If there is one willing to issue bonds with guaranteeing a certain interest to the bond buyers, there could be either individuals or business entities willing to purchase those though in the latter case there might be an additional financial analysis required to approve the transaction. Lots of investment funds possess other people’s money hence they are often legally obliged to invest them reasonably up to some point of risk and not operate any loose ended transactions, which is usually stated by limiting the fund to invest in particularly well rated bonds by agencies such as Standard & Poor’s or Moody’s Investors Service are. Nevertheless there may be a third party, the credit default swap seller, insuring the bond buyer’s principal, unless its security ranking is below the minimum mutually agreed upon, which enables the bond buyer to invest in bonds initially rated below the minimum in exchange for paying the credit swap seller a percentage of the bond’s interest. The principal is to be paid back to its investor at maturity of the bond by the issuer and that is essentially what the credit default swap seller is responsible for, in case of a default, excluding the eventual interest. However, such scenarios are based on trust in the insurer that she can comply with her security rank from an

Usually the consequence of systemic risk taking place is a recession thus a slowdown of the flow of money unless a minimal risk is involved which could have been noted during the economic crisis in 2008. Nevertheless, as well as particular sorts of risks, interrelated companies could also be a part of systematic risk should they represent a significant part of their respective industries. Idiosyncratic risks generally affects whatever the investor in the same way since it stems in rather uncontrollable aspects, such as inflation or deflation, interest rates increasing or decreasing and tax policies changing. The important key to cope with idiosyncratic risk is to diversify one’s investments and try to minimize the eventual consequences of the risk thereby, which could be demonstrated on sports betting. The moment the match is on, contradicting bets will be of increasing and decreasing odds according to the score which sooner or later provides the bettor with a possibility of an “insurance” by placing a stake on the contradicting bet secondary to the initial one so that he or she break even at