If investors are too slow to update their beliefs about a stock's future performance when new evidence arises, they are exhibiting ________.
A) representativeness bias
B) framing error
C) conservatism
D) memory bias

Question

Quizplus · Accepted Answer

Conservatism bias is the tendency for beliefs to be held onto for too long, even after evidence refutes them. In this scenario, investors are slow to update their beliefs, implying they are exhibiting conservatism biases.

If Investors Are Too Slow to Update Their Beliefs About