Reference point
The first premise of prospect theory. Choices are evaluated relative to a reference point, which is the well-being of the investor, rather than in absolute terms.
This one is not written up yet
The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.
Written up from the same chapter
Where this is taught
Free preparation for NISM Series X-B← All terms