According to your textbook,what is one reason why people tend to make poor investing decisions,such as selling a stock immediately after it has lost a significant amount of value?
A)People tend to be place more value on money lost than on money gained,a bias known as loss aversion.
B)The new value of the stock serves as an anchor,which causes the investor to think the stock is worth less than it really is.
C)Investing strategies form a mental set,which interferes with the investors adjusting to the new value of the stock.
D)The availability heuristic leads the investors to sell the stock so they can increase the availability of money to reinvest.

Question

Quizplus · Accepted Answer

The textbook states that one reason for poor investing decisions is that people tend to be more affected by losses than gains, or have a bias towards loss aversion. This can lead to selling a stock immediately after a significant loss, even if it may eventually recover.

According to Your Textbook,what Is One Reason Why People Tend