What term describes an oversimplified or biased mental picture of a person or group?

The term that describes an oversimplified or biased mental picture of a person or group is "stereotype." Stereotypes often arise when people make generalizations about a group based on limited information or experiences, leading to an inaccurate and simplified perception of individuals within that group. This can perpetuate misunderstandings and reinforce social biases, as stereotypes do not account for the diversity and individuality within the group.

In the context of social interactions and personal finance, recognizing and challenging stereotypes is essential, as they can affect decisions, relationships, and opportunities. For example, if someone holds a stereotype about a particular demographic group, that belief could influence how they approach financial literacy resources or services targeting that demographic.

Other options such as prejudice, profile, and assumption have distinct meanings. Prejudice refers specifically to preconceived opinions that are not based on reason or actual experience, rather than just an oversimplified picture. A profile typically refers to a description or outline of someone's characteristics but does not inherently connote bias or simplification. An assumption represents something accepted as true without proof, which is broader than the narrow bias associated with a stereotype. Thus, the correct term in this context is indeed stereotype.