Which of the following statements correctly present recommendations based on behavioral finance?
I. Don't hesitate to sell a losing stock.
II. Trade frequently.
III. Chase performance.
IV. Be humble and open-minded.
A) I and II only
B) I and IV only
C) II and III only
D) III and IV only

Question

Quizplus · Accepted Answer

I. Don't hesitate to sell a losing stock - This aligns with the recommendation to avoid the disposition effect, where investors hold onto losing stocks too long in the hope they will rebound.IV. Be humble and open-minded - This is advised to counteract overconfidence bias, where investors might overestimate their knowledge or the accuracy of their predictions.

Which of the Following Statements Correctly Present Recommendations Based on Behavioral