Availability bias affects investors through which of the following mechanisms?

Availability bias occurs when individuals rely on readily accessible or easily recalled information to make decisions, especially regarding probabilities and outcomes. This cognitive bias can lead investors to overestimate the likelihood of events that are more memorable or recent, rather than evaluating risks based on a more balanced or comprehensive examination of data.

In the context of investing, this means that if an investor has recently encountered information about a particular stock or investment opportunity, they may assign it a higher probability of success simply because it comes to mind easily. For example, if an investor remembers a recent news story about a tech company performing well, they may overvalue investment opportunities in that sector without considering more extensive data or historical performance.

The other options do not accurately represent the nature of availability bias. Evaluating investments based on comprehensive data analysis would reduce the effect of this bias, while focusing only on low-risk alternatives or solely on historical performance does not specifically relate to how readily available information influences decision-making.