Barber and Odean (2000) Ranked Portfolios by Turnover and Report

question 6

Multiple Choice

Barber and Odean (2000) ranked portfolios by turnover and report that the difference in return between the highest and lowest turnover portfolios is 7% per year. They attribute this to

• A) overconfidence.
• B) framing.
• C) regret avoidance.
• D) sample neglect.

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Definitions:

Irrational Beliefs

Thoughts or beliefs that are not based on reality or rational reasoning, often leading to negative emotional outcomes or behaviors.

Inner Conflict

A psychological struggle within one's self due to opposing desires or beliefs.

External Stressor

Factors outside an individual that induce stress, such as environmental conditions or life events.

Top-Level Executives

are individuals who hold the highest positions in an organization, responsible for making overarching decisions and setting strategic directions.