Errors in information processing can lead investors to misestimate
A)true probabilities of possible events and associated rates of return.
B)occurrence of possible events.
C)only possible rates of return.
D)the effect of accounting manipulation.

Question

Quizplus · Accepted Answer

Errors in information processing can lead investors to misjudge the probabilities of possible events, which can in turn cause them to misestimate the associated rates of return. This can be particularly problematic if investors fail to account for rare but potentially devastating events, such as a major market crash or a natural disaster.

Errors in Information Processing Can Lead Investors to Misestimate