Which of the following are common but dysfunctional investor behaviors?
I. overinvesting in companies with familiar names
II. dividing their funds equally among available choices, even if several of the choices serve the same purpose
III. holding on to a stock that has dropped in value because you would be willing to buy it at its current price
IV. overestimating one's ability to pick successful investments
A) I and IV only
B) II and III only
C) I, II and IV only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

I, II, and IV are all common but dysfunctional investor behaviors. Overinvesting in companies with familiar names can lead to a lack of diversification and increased risk. Dividing funds equally among available choices, even if several of the choices serve the same purpose, can result in a portfolio that is not well-balanced. Overestimating one's ability to pick successful investments can lead to poor investment decisions and losses.

Which of the Following Are Common but Dysfunctional Investor Behaviors