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Answered: - I was looking for the answers to these questions. the link to the


I was looking for the answers to these questions.?

the link to the video is?https://www.youtube.com/watch?v=6sjtidkYAec


Study Guide Questions for the Nova Video Mind Over Money

 

Instructions. Read the introduction and questions below, and then watch the Mind Over

 

Money video (run time is slightly less than one hour). Next compose answers to the

 

three study guide questions below. Answers should be approximately one paragraph

 

per question ? about one hand written page. DUE NEXT WEEK ? JAN. 10TH AND 11TH

 

ALL THOUGHTFUL and WELL-DEVELOPED RESPONSES

 

WILL RECEIVE FULL CREDIT

 

Introduction. The video "Mind Over Money" explores two views of how individuals

 

behave, and how their individual behavior gets aggregated into market outcomes. The

 

first view is consistent with the main premises of market efficiency ? that the prices of

 

stocks, bonds, real estate and other investments accurately reflect relevant information

 

because these prices are determined by the actions of people who are predominantly

 

rational. This view is supported by the "Rationalists," such as the University of Chicago

 

economists Cochrane, Becker and Fama. The other view comes from economists known

 

as "Behaviorists," explained by the psychologists and economists Lerner, Shiller and

 

Thaler. This view holds that while people may behave "as if" they were performing

 

analytical calculations when they are faced with simple problems, when problems

 

become more complex ? such as whether or not to use adjustable?rate mortgages to

 

buy a home, or whether to buy or sell certain stocks ? people often make mistakes.

 

1.

 

Do you agree with the Rationalists' view that individual behavior regarding money

 

and wealth can be accurately described and predicted by mathematical models? Explain

 

your answer.

 

2.

 

Consider the experiments where a.) a $20 bill is auctioned off at a price higher

 

than $20; b.) people who have only owned a coffee mug for only one hour are willing to

 

sell the mug only if they can get a 50% markup; and c.) the price people are willing to

 

pay for a water bottle is significantly higher after watching a video intended to make

 

them feel sad. Are the results of these experiments consistent with the viewpoint of the

 

Rationalists (that humans' money decisions result from accurate calculations) or the

 

Behaviorists (that money decisions are heavily influenced by mood and emotion)?

 

Explain your answer.

 

3.

 

As pointed out by the video, a belief in market efficiency (that market prices are

 

always right) is usually associated with a belief that government regulation in markets is

 

undesirable, because regulation interferes with the market's ability to determine the

 

best economic price. Do you believe that governments should regulate financial market

 

behavior in ways such as a.) guiding consumers away from taking out mortgages they

 

can't afford, or b.) requiring easy?to?understand disclosure of all the fees charged by

 

mutual funds and banks, or do these (and other) types of regulation do more harm than

 

good for free?market capitalism? Explain your answer.

 


 

 


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