Which one of these is an example of financially irrational behavior?
A)An investor selling stock to realize a profit
B)Increasing the amount you are willing to pay for a stock following a positive announcement
C)Buying a mutual fund to benefit from diversification
D)Casino gambling
E)A firm issuing new shares when their managers feel the stock is overpriced

Question

Quizplus · Accepted Answer

Casino gambling is financially irrational behavior as it involves risking money with no guaranteed return or likelihood of winning. It is essentially a form of entertainment rather than a sound financial decision. The other options involve typical financial decision-making such as selling stock for profit or investing in diversified funds.

Which One of These Is an Example of Financially Irrational