Investor overconfidence tends to cause investors to: I. trade too frequently.
II) invest too heavily in the securities issued by their employer.
III) earn lower rates of return caused by trading frequency.
IV) invest too heavily in companies from their local region.

Question

Quizplus · Accepted Answer

Investor overconfidence can lead to all four behaviors: trading too frequently (I), investing too heavily in securities issued by their employer (II), earning lower rates of return due to the costs and poor timing associated with frequent trading (III), and exhibiting a "home bias" by investing too heavily in local companies (IV).

Investor Overconfidence Tends to Cause Investors To: I