Question 17 â¢ We need to find the portfolio weights that result in a portfolio with an expected return of 9%. We also know the weight of the risk-free asset is one minus the weight of the share since the portfolio weights must sum to one, or 100%.
First, the availability heuristic is a mental shortcut that helps us make a decision based on how easy it is to bring something to mind. In other words, we often rely on how easy it is to think of examples when making a decision or judgment.
The familiarity heuristic stems from the availability heuristic which was studied by Tversky and Kahneman. The availability heuristic suggests that the likelihood of events is estimated based on how many examples of such events come to mind. Tversky and Kahneman created an experiment in order to test this heuristic.