A Study of Trading Behavior of Individual Investors at a Discount

question 25

Multiple Choice

A study of trading behavior of individual investors at a discount brokerage found that individual investors:

• A)trade very actively,despite the fact that their performance is actually worse because of trading costs.
• B)trade very conservatively,despite the fact that their performance is actually worse because of trading costs.
• C)trade very actively,partly because their performance is better than the professionals' because of low trading costs.
• D)trade very conservatively,partly because their performance is better than the professionals' because of low trading costs.

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Definitions:

Frame-breaking Change

Significant transformations in an organization that dramatically alter its processes, culture, or structure.

Incremental Change

Gradual adjustments or improvements made over time to processes, policies, or products rather than large, radical shifts.

Radical Change

Significant and fundamental alterations in strategy, operations, or culture within an organization, often in response to external pressures.

Major Redirection

A significant change in strategy or focus, often requiring an organization or individual to adopt new approaches or paths.