Themes of Behavioral Finance Asset Include

question 21

Multiple Choice

Themes of behavioral finance asset include:
1: Investors err in making investment decisions because they rely on ________.
2: Investors are influenced by form as well substance in making ________.
3: Prices in the financial market are affected ________ and decision frames.

• A) errors; investment decisions; by rules of thumb
• B) rules of thumb; accounting decisions; by errors
• C) errors; accounting decisions; by rules of thumb
• D) rules of thumb; investment decisions; by errors

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Definitions:

Economic Costs

The total cost of choosing one action over another, including both explicit costs (direct payment) and implicit costs (opportunity costs).

Normal Rate

Typically refers to a baseline or standard rate of interest, production, or growth that is considered usual or expected under normal circumstances.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total cost.

Economic Costs

The total cost of choosing one action over another, comprising both the costs directly incurred and the opportunity costs forgone by not taking the alternative action.