Which of the Following Best Describes Behavioural Finance

question 15

Multiple Choice

Which of the following best describes behavioural finance?

• A)investor behaviour is not always rational but is influenced by psychological biases.
• B)investor behaviour is always rational and influenced by psychological biases.
• C)only professional investors will behave rationally and logically while inexperienced investors are influenced by psychological biases.
• D)investors will consider all available information when making their investment decisions and will ignore all personal biases and opinions.

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Definitions:

Obsessive-Compulsive Disorder

is a mental health disorder characterized by recurring, unwanted thoughts (obsessions) and repetitive behaviors (compulsions) that the sufferer feels driven to perform.

Dopamine

A neurotransmitter involved in many functions, including reward and pleasure, motor control, and the regulation of mood, with significant roles in behavior and cognition.

Phobic Responses

Excessive and irrational fear reactions to a specific object or situation, significantly impacting an individual's daily life.

Classical Conditioning

The phenomenon of learning via repeated combinations of two stimuli, causing a response that was first caused by the second stimulus to end up being caused by the first stimulus.