Psychological Money Profile

When someone I work with says or does something that really aggravates me, I respond most frequently by:

    1. telling the person I work with about it;
    2. telling my boss or supervisor about it;
    3. trying to ignore it and hope it doesn’t happen again.

My attitude toward making financial mistakes is closest to:

    1. Oh no, not again;
    2. Mistakes can be our best teachers;
    3. To err is human

How good a driver are you? Compared to the drivers you encounter on the road, are you above-average, average, or below average?

If an acquaintance purchased a stock that later did badly, do you think of this as a mistake or as a case of bad luck?

Which of the following sequences is more likely to occur when a coin is tossed – HHHTTT, or HTHTTH?

You are facing a chance for a gain of $20,000. You do not know the exact probability. Consider the three pairs of outcomes:

The probability is either 0% or 1%.

The probability is either 41% or 42%.

The probability is either 99% or 100%.

Are the three differences, A, B and C, equally significant to a decision-maker?

Could you order them by their impact on preferences?

Imagine that you are richer by $20,000 than you are today, and that you face a choice between options:

A. Receive $5,000, or B. receive a 50% chance to win $10,000 and a 50% chance to win nothing.

Now imagine that you are richer by $30,000 than you are today, and that you are compelled to choose one of two options: C. Lose $5,000, or D. a 50% chance to lose $10,000 and a 50% chance to lose nothing.

Someone offers you a bet on the toss of a coin. If you lose, you lose $100. What is the minimal gain that would make this gamble acceptable.

What sure gain is just as attractive as this risky prospect- a 50% chance to gain $1,000, or a 50% chance to gain nothing?

    a 50% chance to gain $5,000, or a 50% chance to gain nothing?

    b 50% chance to gain $20,000, or a 50% chance to gain nothing?

Consider the eight gambles shown in Exhibit 3. Are they ordered in a descending order of attractiveness?

    EXHIBIT 3. RELATIVE ATTRACTIVENESS OF GAMBLES WITH AN EQUAL EXPECTED VALUE

    Gamble Payoff 1 Probability of Payoff 1 (%) Payoff 2 Probability of Payoff 2 (%)
    A $5,000 95 $105,000 5
    B $5,000 50 $15,000 50
    C $1,000 10 $11,000 90
    D $1,000 90 $91,000 10
    E $2,000 50 $18,000 50
    F $0 50 $20,000 50
    G ($2,000) 90 $118,000 10
    H ($5,000) 50 $25,000 50

Investor A owns a block of stock, which he originally bought at $100 per share. Investor B owns a block of the same stock for which she paid $200 per share. The value of the stock was $160 per share yesterday, and today it dropped to $150 per share. Who is more upset?

Imagine that you face a pair of concurrent decisions, then indicate the options you prefer.

Decision12-1: Choose between:

  1. A sure gain of $2,4000.
  2. 25% chance to gain $10,000 and 75% chance to gain nothing.

    3.  

    Decision 12-2: Choose between:

  3. A sure loss of $7,500.
  4. 75% chance to lose $10,000 and 25% chance to lose nothing.

Choose between:

  1. a.25% chance to win $2,400 and 75% chance to lose $7,600.
  2. b.25% chance to win $2,500 and 75% chance to lose $7,500.

What is your cash- equivalent for one play of a gamble as follows: a 50% chance to win $1,000, or a 50% chance to win nothing?

What is your cash-equivalent for five plays of the same gamble: a 50% chance to win $1,000, or a 50% chance to win nothing?

You are offered one play of the gamble: a 50% chance to win $1,000, or a 50% chance to win nothing. More opportunities to play this gamble may be available later, but you don’t know how many. What is your cash-equivalent for the present opportunity?

In what percentage of months during the last seventy-one years did stocks make money? What was the ratio of the average loss to the average gain? Also answer the same questions for the percentage of consecutive five-year periods (starting at the beginning of the month).

Mr. Paul owns shares in company A. During the past year he considered switching to the stock of company B, but he decided against it. He now finds that he would have been better off by $20,000 if he had switched to company B. Ms. George owned shares in company B. During the past year she switched to the stock of company A. She now finds that she would have been better off by $20,000 if she had kept her shares of company B. Who is more upset?

Think of a bad financial decision that you made, which you now regret. Was it a decision to do something, or to refrain from doing something? What was the role of chance in the outcome?

On a one to seven scale (0-7) from "none" to almost total:

How much financial wealth have you presently attained?

How much financial wealth do you desire in the future?

 

When you make decisions on items of small or medium importance do you tend to consult (circle all that apply):

    1. no one
    2. friends
    3. family
    4. a professional

When you make decisions on items of major importance do you tend to consult (circle all that apply):

    1. no one
    2. friends
    3. family
    4. a professional

Do you tend to make decisions slowly or quickly?

How do you see yourself in relation to what money does for you?

How do you see yourself in relation to what money can do for you?

How do think others see you in relation to what money does for you?

What did your family teach you about money? Do you agree or disagree with that philosophy?

How do you see yourself in thirty years? In forty years? What are doing? What does it cost?

Define:

    1. Money
    2. Risk
    3. Safely
    4. Volatility

Silvia, 31, single, outspoken, and bright, majored in philosophy. As a student she was concerned about issues of social justice and frequently participated in protest demonstrations. Which is more likely?

  1. Sylvia is a bank teller.
  2. Sylvia is a bank teller and active in the feminist movement.

A panel of psychologists interviewed a sample of 30 engineers and 70 lawyers. They summarized their impressions in short notes about each of these individuals. The following description was selected at random from the sample:

    "Herbert is 39 years old. He is married with no children. His father and grandfather were practicing engineers and his hobby is building miniature villages." Is he more likely to be an attorney or engineer?

Picture a word that includes the letter k in its spelling. Is the letter k likely to be the first letter in the word or the third?

Coin #1 was tossed 10 times and landed on heads 8 times.

Coin #2 was tossed 100 times and landed on heads 75 times.

Which coin is likely to be more "honest"?

You are participating in a game of chance and are offered the following choices:

  1. Do not roll the dice and win $1,000.
  2. Roll the dice and win $1,000 per spot on a rolled pair of dice.

Suppose the choice is:
  1. Do not roll the dice and win $3,000.
  2. Roll the dice and win $1,000 per spot on a rolled pair of dice.