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:

Pneumatic Tools

Tools powered by compressed air, used in various applications for their high power-to-weight ratio and simplicity.

Truck Service Shop

A facility specializing in the maintenance, repair, and various service requirements of trucks.

Lightweight

Describes objects or materials designed to be of lower weight to improve efficiency, performance, or ease of handling.

Radial Lines

Lines that radiate from a center point or axis, often used in design, drafting, and the description of circular motion paths.