Which of the Following Are Investor Diversification Problems

question 25

Multiple Choice

Which of the following are investor diversification problems?

• A)Many employees hold mostly their employer's stocks as investments.
• B)Many households hold relatively few individual stocks-the median is three.
• C)Investors seem to prefer local firms thereby limiting diversification opportunities.
• D)All of these are investor diversification problems.

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Definitions:

Groupthink

A phenomenon where the desire for harmony or conformity in a group results in an irrational or dysfunctional decision-making outcome, often sidelining alternative viewpoints.

Groupthink

A psychological phenomenon in which the desire for harmony and conformity in a group results in an irrational or dysfunctional decision-making outcome.

Norms

Shared rules or guidelines that prescribe the behavior that is acceptable and expected within a group or society.

ASA Model

Stands for Attraction-Selection-Attrition Model, a framework used to understand how individuals are attracted to, selected by, and leave organizations, highlighting the role of fit between person and organization.