In a Study of Individually Held Stock Portfolios Over Time

question 12

Multiple Choice

In a study of individually held stock portfolios over time, gains were much more likely to be realized than losses.Fifteen percent of all gains were realized in the time period, while only 10% of losses were.Subsequently, the rising stocks that were sold outperformed the losing stocks that were held.Behavioral economists would explain this as

• A)aversion to losses.
• B)overconfidence as exhibited in excessive trading.
• C)the framing effect (losses vs.gains).
• D)a departure from sound financial practices.
• E)All of the above.

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Definitions:

Moral Imperialism

The imposition of a nation's perceived moral standards and values upon another country or people, often used to justify imperialism and colonization.

Military Interventions

Military interventions are actions undertaken by a nation's military forces to intervene in the affairs of another country, often to enforce international mandates, protect interests, or support allies.

Stability

The state of being steady and unchanging, often used to describe economic, political, or social conditions that are consistently reliable and free from upheaval or disorder.

Panama Canal Zone

The small strip of land on either side of the Panama Canal. The Canal Zone was under U.S. control from 1903 to 1979 as a result of Theodore Roosevelt’s assistance in engineering a coup in Colombia that established Panama’s independence.