Behaviorial finance argues that:
A)investors may be irrational.
B)irrationality may be related across investors rather than canceling out across investors.
C)arbitrage strategies may involve too much risk to eliminate market efficiencies.
D)A, B, and C
E)None of the above.

Question

Quizplus · Accepted Answer

Behavioral finance argues that investors may be irrational (A), and that this irrationality may be related across investors rather than canceling out across investors (B). It also recognizes that arbitrage strategies may involve too much risk to eliminate market efficiencies (C). Therefore, all three options (A, B, and C) are correct.

Behaviorial Finance Argues That