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:

Sandstone

A sedimentary rock composed mainly of sand-sized mineral particles or rock fragments, often used in building construction.

Laocoön

This term refers to a Trojan priest of Poseidon in Greek mythology, who warned against accepting the Greek wooden horse, and to the famous ancient sculpture depicting Laocoön and his sons being attacked by sea serpents.

Aeneid

The "Aeneid" is an epic poem written by the Roman poet Virgil, telling the legendary story of Aeneas, a Trojan who traveled to Italy and became the ancestor of the Romans.

Iliad

An ancient Greek epic poem attributed to Homer, chronicling the siege of Troy and highlighting themes of heroism, wrath, and the follies of gods and men.