CHAPTER 20: Discussion Questions and Problems
1. Differentiate the following terms/concepts:
a. implicit learning and practice
b. practical knowledge and tacit knowledge
c. expertise and ability
d. brain function and brain part
2. The fact that uncertainty and risk are experienced differently might matter in
times of financial crisis. Discuss.
With a risky choice, the person can assess the probability of the outcomes, but under
uncertainty the probabilities are unknown. Researchers have found that when facing
3. Emotional balance is desirable for financial traders. Discuss.
Emotions can enhance decision-making. For example, our emotions allow us to make a
4. Since graduation from college, your friend William has become a highly paid
and successful financial advisor. His list of clients is long, and his advice is
sought by many. Discuss the merits of the following statement: William’s
success is primarily driven by luck.
5. The evidence suggests that the benefit of becoming a skilled financial advisor
may far exceed the cost. Discuss why this would be true.