Behavioral finance suggests that
A)investors are not informed
B)individuals make rational investment decisions
C)investors may be subject to bias which leads to excessive buying or selling of stocks
D)emotion plays only a minor role in security selection

Question

Quizplus · Accepted Answer

Behavioral finance studies the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory, which includes the understanding that biases can lead to irrational investment behaviors such as excessive trading.

Behavioral Finance Suggests That