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The endowment effect is overvaluing assets because of ownership or attachment. Status quo (A) is inertia. Anchoring (C) is fixation on past values. Representativeness (D) is pattern extrapolation.

Representativeness bias assumes patterns from the past will continue indefinitely. Recency (A) emphasizes most recent outcomes. Anchoring (C) is fixation on values. Confirmation bias (D) is selective evidence gathering.

Treasury bills (short-term government securities) are considered risk-free proxies in CAPM because of negligible default risk and short maturity. Longer bonds (A) have interest rate risk. Corporate bonds (B) carry credit risk. Money markets (C) invest in short-term debt but not pure proxies.

An ILIT (Irrevocable Life Insurance Trust) provides life insurance proceeds outside the estate, offering liquidity to cover estate taxes. QPRTs (A) transfer homes. GRATs (C) freeze appreciation. Revocable trusts (D) manage but don’t remove assets.

An Irrevocable Life Insurance Trust (ILIT) keeps insurance proceeds out of the taxable estate. Revocable trusts (A) don’t remove assets. CLTs (C) benefit charity. QTIPs (D) qualify for marital deduction.