Which concept refers to the tendency to trust technology too much and not verify?

Prepare for the NGPF Personal Finance – Investing Test with multiple choice questions, hints, and explanations. Boost your financial literacy and investment skills. Get exam-ready!

Multiple Choice

Which concept refers to the tendency to trust technology too much and not verify?

Explanation:
Automation bias is the tendency to trust technology and accept its outputs without verifying. In investing, this shows up when you rely on robo-advisors, automated screeners, or financial calculators to make decisions and you don’t double-check that the suggested allocation, forecast, or risk assessment still fits your goals. Use technology as a helpful tool, but always validate with your own analysis, question assumptions, and test how inputs like risk tolerance and time horizon align with your plan. This isn’t about saving or time horizon, which are separate concepts, nor about decisions driven by emotions.

Automation bias is the tendency to trust technology and accept its outputs without verifying. In investing, this shows up when you rely on robo-advisors, automated screeners, or financial calculators to make decisions and you don’t double-check that the suggested allocation, forecast, or risk assessment still fits your goals. Use technology as a helpful tool, but always validate with your own analysis, question assumptions, and test how inputs like risk tolerance and time horizon align with your plan. This isn’t about saving or time horizon, which are separate concepts, nor about decisions driven by emotions.

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