Explain and Give an Example of the Following Three Judgment

question 78

Essay

Explain and give an example of the following three judgment shortcuts as they impact decision making; overconfidence bias,anchoring bias,confirmation bias.

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Definitions:

Front-end Loads

Charges paid by investors at the time of purchasing a mutual fund.

Back-end Loads

Fees paid by investors when selling mutual fund shares, typically decreasing over time the longer the shares are held.

Hedge Fund

A private investment fund that employs a variety of strategies to earn active return, or alpha, for their investors, often involving leverage, derivatives, and short selling.

SEC Regulation

A set of rules and laws enacted by the U.S. Securities and Exchange Commission to regulate securities markets and protect investors.