Behavioral finance considers how various psychological traits affect how individuals or groups act as investors, analysts, and portfolio managers.

Question

Quizplus · Accepted Answer

This statement is true. Behavioral finance is a subfield of finance that focuses on understanding how psychological biases and emotions can affect financial decision-making. It takes into account factors such as overconfidence, loss aversion, and herding behavior, which can all impact the behavior of individuals or groups in financial markets.

Behavioral Finance Considers How Various Psychological Traits Affect How Individuals