The field of behavioral finance has observed that: A) investors never make investment decisions based on...

The field of behavioral finance has observed that:

		A) investors never make investment decisions based on sentimentality.
		B) investors tend to place too much faith in their ability to spot mispriced stocks.
		C) when forecasting the future, people always tend to rely heavily on fundamental analysis.
		D) investors like stocks of companies whose names begin with letters that occur early in the alphabet.

Solutions

Expert Solution

The field of behavioral finance has exposed many biases in both the investors and management perpsectives in their decision making. Some of these biases include confimation bias, anchoring, loss aversion bias, etc.

Answer is B) investors tend to place too much faith in their ability to spot mispriced stocks.

jeff jeffy answered 1 year ago

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