Four "decision traps " identified by behavioral finance are
A) overconfidence, representativeness, loss aversion, narrow framing.
B) lack of confidence, representativeness, overreaction, narrow framing.
C) overconfidence, representativeness, loss aversion, comprehensive framing.
D) overconfidence, unfamiliarity bias, loss aversion. narrow framing.

Question

Quizplus · Accepted Answer

Overconfidence, representativeness, loss aversion, and narrow framing are indeed recognized as decision traps in behavioral finance. These biases can lead individuals to make less optimal financial decisions by overestimating their knowledge, relying too heavily on stereotypes, fearing losses more than valuing gains, and viewing decisions without considering all alternatives or implications.

Four "Decision Traps " Identified by Behavioral Finance Are