Reading 54: Efficient Capital Markets LOSd习题精选 describe, behavioral, additional, 2010

honeycfa

LOS d: Define behavioral finance and describe prospect theory, over-confidence bias, confirmation bias, and escalation bias.

The tendency to commit additional funds to a position that has decreased in value is known in behavioral finance as:

A) confirmation bias.

B) escalation bias.

C) overconfidence bias.

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The tendency to commit additional funds to a position that is decreasing in value falls under the heading of escalation bias in the context of behavioral finance.

honeycfa

With respect to behavioral finance, the tendency to place too much faith in an earnings forecast is known as:

A) anchoring.

B) confirmation bias.

C) overconfidence bias.

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The tendency to place too much faith in an earnings forecast falls under the heading of overconfidence bias in the context of behavioral finance.

honeycfa

In behavioral finance, the tendency to seek out good news and ignore bad news is called:

A) escalation bias.

B) confirmation bias.

C) overconfidence bias.

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The tendency to seek out good news and ignore bad news falls under the heading of confirmation bias in the context of behavioral finance.

honeycfa

In behavioral finance, the tendency to seek out good news and ignore bad news is called:

A) escalation bias.

B) overconfidence bias.

C) confirmation bias.

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The tendency to seek out good news and ignore bad news falls under the heading of confirmation bias in the context of behavioral finance.