Which of the Following Tendencies of Individual Investors Is Called

question 100

Multiple Choice

Which of the following tendencies of individual investors is called the disposition effect?

• A)the tendency to trade too much based on the mistaken belief that they can pick winners and losers better than investment professionals
• B)the tendency to buy stocks that have been in the news,advertised more,have very high trading volume,or recently had extreme (high or low)returns
• C)the tendency to put too much weight on their own experience rather than considering historical evidence
• D)the tendency to hold on to stocks that have lost value and sell stocks that have risen in value since the time of purchase
• E)the tendency for stock returns to be higher on sunny days

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Definitions:

Perishable Product

Items that have a limited shelf life and require timely sale and use, such as food, flowers, and some pharmaceuticals.

Privileged Information

Sensitive information that is not publicly available and is restricted to certain individuals or groups due to its confidentiality.

Situational Self-Image

The image or conception that individuals have of themselves in specific situations, which can change depending on context and environment.

Decision-Making Time

The period during which a person or group considers various options and outcomes before making a final choice.