Institutional Investors Often Take Advantage of the Small Firm Effect

question 27

True/False

Institutional investors often take advantage of the small firm effect.

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Definitions:

False Consensus Effect

The tendency to overestimate the extent to which others share one's beliefs, attitudes, or behaviors.

False Consensus Effect

A cognitive bias whereby people overestimate the degree to which their beliefs, opinions, preferences, values, and habits are normal and typical of those of others.

False Uniqueness Effect

The tendency of people to underestimate the commonality of their abilities and desirable or successful behaviors.

Base Rate Information

Statistical data that represents the general probability of an event or characteristic within a population.