Conventional finance theory assumes investors are ________, and behavioral finance assumes investors are ________.
A) rational; irrational
B) irrational; rational
C) greedy; philanthropic
D) philanthropic; greedy

Question

Quizplus · Accepted Answer

Conventional finance theory assumes that investors are rational and make decisions based on logical and objective analysis of available information. Behavioral finance, on the other hand, recognizes that investors are subject to cognitive biases and emotional influences that can result in irrational decision-making.

Conventional Finance Theory Assumes Investors Are ________, and Behavioral Finance