Behavioral Finance Read 7 page 45-46 EOC #5 reference, understand, different

farrukhsadiq

Hello,
EOC question #5 page 45-46 has answer C
Can anyone elaborate on why it’s not answer A - Prospect theory? it says in the answer key that “loss aversion in prospect theory is discussed from a different perspective”
not sure I understand that? we have 2 phases and then our subjective probabilities which leads to risk seeking behavior.
Prospect theory would indicate that individuals hold onto their losers too long. it is based on a reference point as well.
Hopefully, someone can shed some light on the “different perspective”.
Thank you,