Some Investors in the Stock Market Become Overconfident and Ignore

question 121

Multiple Choice

Some investors in the stock market become overconfident and ignore evidence that their strategies are more likely to lose money.This can be attributed to _____.

• A)the primacy effect
• B)confirmation bias
• C)the recency effect
• D)the prophecy effect
• E)stereotyping

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Definitions:

Contractual Term

A provision or condition outlined in a contract that defines the obligations, rights, and duties of the parties involved.

Novation

The creation of a new contract through the substitution of a third party for one of the original parties to a contract by the consent of all.

Third Party

An entity not directly involved in a transaction or legal agreement but who may be affected by it.

Force Majeure

A contractual clause that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control occurs.