Bad investment decisions can be made in a category of funds due to poor performing funds not being considered. This is called ___________,
A) trend analysis.
B) fundamental analysis.
C) portfolio bias.
D) survivorship bias.
E) None of the options are correct.

Question

Quizplus · Accepted Answer

Survivorship bias occurs when only successful entities are considered in an analysis, leading to a distorted view that overlooks those that have failed or performed poorly. In the context of investment funds, this means ignoring the funds that have not done well, which can lead to overly optimistic expectations.

Bad Investment Decisions Can Be Made in a Category of Funds