Which of the Following Is a Fundamental Principle Ofbehavior Finance

question 34

Multiple Choice

Which of the following is a fundamental principle ofbehavior finance

• A) the use of P/E ratios
• B) the tendency to avoid acknowledging investment errors
• C) selling stocks at a loss for tax purposes
• D) constructing a diversified portfolio

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Definitions:

Dominating Influence

A significant impact or control over individuals or situations, often leading to a position of authority.

Authority

The legitimate power given to an individual or a body to make decisions and enforce obedience.

Power

The capacity or ability to direct or influence the behavior of others or the course of events.

Operative

Relating to or involved in the functioning of operations or activities within an organization or system.