In a Study of Individually Held Stock Portfolios Over Time

question 12

Multiple Choice

In a study of individually held stock portfolios over time, gains were much more likely to be realized than losses.Fifteen percent of all gains were realized in the time period, while only 10% of losses were.Subsequently, the rising stocks that were sold outperformed the losing stocks that were held.Behavioral economists would explain this as

• A)aversion to losses.
• B)overconfidence as exhibited in excessive trading.
• C)the framing effect (losses vs.gains).
• D)a departure from sound financial practices.
• E)All of the above.

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