Q1. According to behavioral finance, investors have biases that result in chronic inefficiencies in the market. In this view, which of the following is the most likely scenario? When a stock rises in price above the investors’ original target price, the investor will: A) hold the price target steady and sell shares only if the stock drops in price. B) revise the price target upwards, subsequently sell shares, and reduce risk. C) revise the price target upwards, buy more shares, and incur more risk.
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