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What Is the Main Difference Between Behavioral Finance and Traditional

Question 14

Multiple Choice

What is the main difference between behavioral finance and traditional finance?


A) Behavioral finance tells us that both investors and social entrepreneurs deal with the real-world complexity of financial markets by relying on heuristics versus traditional finance that uses models in which people are self-interested and rational
B) Traditional finance tells us that both investors and social entrepreneurs deal with the real-world complexity of financial markets by relying on heuristics versus behavioral finance that uses models in which people are self-interested and rational
C) There is no main difference: both behavioral finance and traditional finance tell us that both investors and social entrepreneurs deal with the real-world complexity of financial markets by relying on heuristics and use models in which people are self-interested and rational
D) There is no main difference: both behavioral finance and traditional finance tell us that both investors and social entrepreneurs deal with the real-world complexity of financial markets by relying on heuristics but neither use models in which people are self-interested and rational

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