A Study of Trading Behavior of Individual Investors at a Discount

question 119

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.
• E)trade very actively,because they avoid the costs associated with hiring a professional.

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Definitions:

Preexisting Attitudes

Attitudes or opinions that an individual holds before being exposed to new information or experiences.

Punish

To impose a penalty on someone as consequence for their wrongdoing or unacceptable behavior.

Private Self-consciousness

An individual's tendency to focus on inner thoughts, feelings, and experiences, leading to a heightened awareness of self.

Alcohol Preferences

An individual's specific liking or choice for certain types of alcoholic beverages over others, which can be influenced by cultural, social, and personal factors.