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

---

Definitions:

Organization's Profitability

A measure of the efficiency and financial success of an organization, determined by the extent to which its income exceeds its costs and expenses.

Period of Time

A specific duration marked by a beginning and an end, often used to describe or measure events or changes.

Indebtedness

The condition of owing money or being under financial obligation to others, which could include loans or issued bonds.