Individual Investors' Tendency to Trade Too Much Based on the Mistaken

question 30

Multiple Choice

Individual investors' tendency to trade too much based on the mistaken belief that they can pick winners and losers better than investment professionals is known as ________.

• A) the disposition effect
• B) the investor attention hypothesis
• C) the investor overconfidence hypothesis
• D) the excessive trading costs hypothesis

---

Definitions:

Adjusted

The process of making modifications to financial statements or data to represent accurately the economic reality, often excluding one-time or non-recurring items.

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period, which is then expensed during the period the space is occupied or used.

Rent Expense

The cost incurred by a company for leased property used in business operations over a specified period.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, representing the wear and tear, deterioration, or obsolescence of the asset.