CPWA
$466K Tax Rates - answer3.8% Surtax + 0.9% Wage + 39.6%
Qualified Dividends - answer Hold for 60 days during 121 day period
Wash Sale Rule – answer Can't buy back within 30 days or within 61 days for
reacquisition such as buying same stock or warrant.
AGI Charitable Limits – answer Public / Private. / . / .
Cash / STCG / LTCG / Property
Gift & Estate Tax - answer40% / $5.4M Exemption / $2.1M Unified
Prospect Theory – answer More Risk Averse 2 times more than Pleasure. S-shaped
curve.
Paradox of Choice - answerMore choices don't improve performance. Can get
overwhelmed.
Adaptive Market Hypothesis - answerReconciles Efficient Market Hypothesis in
behavioral economics.
Cognitive Dissonance - answerExperience mental discomfort or uncertainty. (Ex: Hold
losses rather than sell because of mental pain of being wrong, Continue to invest when
its already gone down.)
Conservatism bias - answerCling to a view or forecast, behaving too inflexibly when
presented with new information. (Ex: May fail to take action on a negative
announcement and Might be too slow to sell.)
Confirmation bias - answerCause investors to seek out only information that
CONFIRMS THEIR BELIEFS and not information that contradicts it. (Ex: Might create
stock concentration because they work there or they become infatuated with certain
stocks creating a lopsided portfolio.)
Representative bias - answerMake inaccurate decisions when facing complex problems
or choices based on the SIMILARITY of details.
Illusion of Control - answerBelieve that they can CONTROL or influence outcome so it
can lead to trading more which end in decreased returns. (Ex: investors who have been
successful in business or other professional pursuits feel that they should also be
successful in investments.)
, Hindsight bias - answerWhen an investment appreciates, tend to rewrite their own
memories to portray the positive developments as if they were PREDICTABLE.
Mental Accounting - answerTend to CATEGORIZE THEIR ASSETS and make
decisions.
Anchoring - answerInfluenced by HISTORICAL information.
Framing - answerRespond to similar situations differential based on CONTEXT or
PERSPECTIVE.
Availability - answerEstimate probability based on how FAMILIAR outcomes are in their
lives.
Self-attribution - answerAscribe successes to their INNATE talents and BLAME failures
on outside influences.
Outcome - answerMake decisions based solely on the RESULTS of past events.
Recency - answerEasily recall and emphasize RECENT events.
Loss-aversion - answerGenerally feel the PAIN OF LOSS twice as much as they feel
pleasure of gain. Prospect Theory.
Overconfidence - answerShows UNWARRANTED faith in their own thoughts.
Self-control - answerTend to fail to act in the pursuit of their own long term goal. Choose
SHORT TERM GRATIFICATION.
Status quo - answerSelect the option that confirms EXISTING CONDITIONS.
Endowment - answerPlace a higher value on assets that they OWN versus what they
don't.
Regret-aversion - answerAvoid taking decisive action because they are AFRAID of
looking back.
Affinity - answerMake irrational decisions based on how well they believe their choice
will reflect their OWN VALUES.
Sunk-cost Fallacy - answerMore likely to continue with a project if they have ALREADY
INVESTED A LOT OF MONEY when it's not the best thing to do.
Get-even-itis - answerPrioritizing the minimIZation of loss.
$466K Tax Rates - answer3.8% Surtax + 0.9% Wage + 39.6%
Qualified Dividends - answer Hold for 60 days during 121 day period
Wash Sale Rule – answer Can't buy back within 30 days or within 61 days for
reacquisition such as buying same stock or warrant.
AGI Charitable Limits – answer Public / Private. / . / .
Cash / STCG / LTCG / Property
Gift & Estate Tax - answer40% / $5.4M Exemption / $2.1M Unified
Prospect Theory – answer More Risk Averse 2 times more than Pleasure. S-shaped
curve.
Paradox of Choice - answerMore choices don't improve performance. Can get
overwhelmed.
Adaptive Market Hypothesis - answerReconciles Efficient Market Hypothesis in
behavioral economics.
Cognitive Dissonance - answerExperience mental discomfort or uncertainty. (Ex: Hold
losses rather than sell because of mental pain of being wrong, Continue to invest when
its already gone down.)
Conservatism bias - answerCling to a view or forecast, behaving too inflexibly when
presented with new information. (Ex: May fail to take action on a negative
announcement and Might be too slow to sell.)
Confirmation bias - answerCause investors to seek out only information that
CONFIRMS THEIR BELIEFS and not information that contradicts it. (Ex: Might create
stock concentration because they work there or they become infatuated with certain
stocks creating a lopsided portfolio.)
Representative bias - answerMake inaccurate decisions when facing complex problems
or choices based on the SIMILARITY of details.
Illusion of Control - answerBelieve that they can CONTROL or influence outcome so it
can lead to trading more which end in decreased returns. (Ex: investors who have been
successful in business or other professional pursuits feel that they should also be
successful in investments.)
, Hindsight bias - answerWhen an investment appreciates, tend to rewrite their own
memories to portray the positive developments as if they were PREDICTABLE.
Mental Accounting - answerTend to CATEGORIZE THEIR ASSETS and make
decisions.
Anchoring - answerInfluenced by HISTORICAL information.
Framing - answerRespond to similar situations differential based on CONTEXT or
PERSPECTIVE.
Availability - answerEstimate probability based on how FAMILIAR outcomes are in their
lives.
Self-attribution - answerAscribe successes to their INNATE talents and BLAME failures
on outside influences.
Outcome - answerMake decisions based solely on the RESULTS of past events.
Recency - answerEasily recall and emphasize RECENT events.
Loss-aversion - answerGenerally feel the PAIN OF LOSS twice as much as they feel
pleasure of gain. Prospect Theory.
Overconfidence - answerShows UNWARRANTED faith in their own thoughts.
Self-control - answerTend to fail to act in the pursuit of their own long term goal. Choose
SHORT TERM GRATIFICATION.
Status quo - answerSelect the option that confirms EXISTING CONDITIONS.
Endowment - answerPlace a higher value on assets that they OWN versus what they
don't.
Regret-aversion - answerAvoid taking decisive action because they are AFRAID of
looking back.
Affinity - answerMake irrational decisions based on how well they believe their choice
will reflect their OWN VALUES.
Sunk-cost Fallacy - answerMore likely to continue with a project if they have ALREADY
INVESTED A LOT OF MONEY when it's not the best thing to do.
Get-even-itis - answerPrioritizing the minimIZation of loss.
