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Placeholder Lesson:
** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
Optimism bias is the tendency to overestimate the likelihood of positive outcomes and underestimate negative ones.
People believe they are less likely than others to experience misfortune.
This can lead to taking on too much risk or neglecting necessary precautions.
In finance, it may create unrealistic return expectations.
Optimism bias makes the world seem more favorable than it statistically is.