The premise of behavioral finance is that
A) conventional financial theory ignores how real people make decisions and that people make a difference.
B) conventional financial theory considers how emotional people make decisions, but the market is driven by rational utility-maximizing investors.
C) conventional financial theory should ignore how the average person makes decisions because the market is driven by investors who are much more sophisticated than the average person.
D) conventional financial theory considers how emotional people make decisions, but the market is driven by rational utility-maximizing investors and should ignore how the average person makes decisions because the market is driven by investors who are much more sophisticated than the average person.
E) None of the options are correct.
Correct Answer:
Verified
Q3: An example of _ is that a
Q4: Information processing errors consist ofI) forecasting errors.II)
Q5: If a person gives too much weight
Q6: Forecasting errors are potentially important because
A) research
Q7: _ are good examples of the limits
Q9: DeBondt and Thaler believe that high P/E
Q10: A trin ratio of less than 1.0
Q11: Barber and Odean (2000) ranked portfolios by
Q12: In regard to moving averages, it is
Q13: Statman (1977) argues that _ is consistent
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