Which of the Following Is the Best Definition of "Behavioral

question 12

Multiple Choice

Which of the following is the best definition of "behavioral finance?"

• A) Behavioral finance studies how financial market participants behave.
• B) Behavioral finance studies the ethical behavior of investors.
• C) Behavioral finance studies what investors should do to optimize performance.
• D) Behavioral finance studies how investor biases and emotions affect stock prices.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.