If Investors Believe That Others Have Superior Information Which They

question 37

Multiple Choice

If investors believe that others have superior information which they can take advantage of by copying their trades,this can lead to:

• A)an informational cascade effect.
• B)a disposition effect.
• C)a sensation seeking effect.
• D)an overconfidence bias.

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Definitions:

Psychological Dimension

An aspect of mental or emotional states that can influence behavior and perception.

Timbre

The quality of a sound that distinguishes different types of sound production, such as voices or musical instruments.

Complexity

The state or quality of being intricate or complicated, often referring to systems or problems with multiple interconnected parts.

Taste Buds

Sensory organs located on the tongue that allow us to perceive different tastes such as sweet, sour, salty, and bitter.