In relation to behavioural finance,if an investor is influenced to follow other investors into certain investment opportunities,this is called:
A) trading noise.
B) herding instinct.
C) framing behaviour.
D) disposition effect.

Question

Quizplus · Accepted Answer

The herding instinct refers to the tendency of investors to follow the actions of a larger group, rather than making independent decisions based on their own research and analysis. This behaviour can lead to market bubbles and crashes, as well as missed opportunities for individual investors who don't have access to the same information as the larger group.

In Relation to Behavioural Finance,if an Investor Is Influenced to Follow