1. What is the main idea of the paragraph about loss aversion?
A. Investors' fear of losses can lead to poor financial decisions.
B. People prefer keeping their money in low-risk accounts to stay financially secure.
C. Avoiding losses helps individuals make smarter investment choices.
D. Market uncertainty discourages most people from investing.
2. How can loss aversion affect long-term finances?
÷
A. It teaches people to be patient and wait for the right moment to invest.
B. It encourages people to invest carefully and protect their savings.
C. It helps people avoid risky investments, which always lead to losses.
D. It may lead to low-interest savings that are insufficient for retirement.
3. What is a common mistake made by overconfident investors? ÷
A. They underestimate risks, assuming past success guarantees future gains.
B. They refuse to sell failing investments, convinced the price will rise again.
C. They believe they can predict market movements and invest aggressively.
D. They invest in popular trends, thinking they can predict the market.
4. Why does the passage mention spending $5 a day at Starbucks?
A. To discourage people from spending money on non-essential items.
B. To explain why people buy small luxuries without thinking about long-term costs.
C. To show how small, regular expenses can add up and affect overall finances.
D. To argue that budgeting means only spending money on necessities.
5. What is one suggested way to control unnecessary spending?
A. Using tools to track expenses and set spending limits.
B. Avoiding all discretionary purchases to maximize savings.
C Keeping money in a savings account to reduce temptation.
FUDVERFLOW.COM wing monthly expenses to understand spending habits.
