上一主题:Need Help on a question from investment appraisal
下一主题:consequences of not learning Currency/Equity Swaps and swapt
返回列表 发帖

Very tricky EOC Q on Behavioral Biases (Reading 8)

Thought these were pretty subjective and even unfair.
Question 1: Why is “Gerber believes that the research setbacks are temporary because of ABC’s past success with projects” not an acceptable answer for availability bias?
Question 2: Why is “He expects that ABC will begin Phase Two within a year, and also believes that once Project M goes into Phase Two, ABC’s stock price should reach a new 52-week high of CHF 80” not an acceptable answer for overconfidence?  I thought that the emphasis on the exact price was an example of a very narrow range of forecasted values.
Question 5: Again with the 52-week high of CHF 80.  I thought this was overconfidence.  How is this anchoring? We are never told that this was his original forecast that he is sticking to despite new information.
Question 10: Why is regret aversion not exhibited?  Jordan explains her actions by saying “the portfolio will not be able to take advantage of the reverseion to the mean if she sells certain losing positions.”  Isn’t this error of commission?

返回列表
上一主题:Need Help on a question from investment appraisal
下一主题:consequences of not learning Currency/Equity Swaps and swapt