9 & 10
9. The study of behavioral finance has best helped explain which of the following investor
behav- iors? (a) Investors are often unable to short-sell unfavorable stocks. (b) Investors often
create undiversified portfolios (c) Investors tend to sell their losing stocks and retain stocks that
have capital gains. (d) Investors are generally too slow to update their beliefs in the face of new
evidence 10. Briefly discuss some of the important findings of behavioral finance studies.
Solution
9) d is correct
Behavioral finance has been very helpful in explaining that inveatinv are too slow to update their
beliefs in the face of new evidences.
10) Behavioral finance has focused on two crucial areas and they are attitude towards risk and
beliefs about probability. It tells us that security mispricing can result from the investor\'s attitude
towards risk and how they asses probability. It deals with behaviour of investors at the time of
capital gain and capital loss. It tells us that investors are either risk averse or risk loving that is
they do not behave rationally..
9 & 10 9. The study of behavioral finance has best helped explain .pdf
1. 9 & 10
9. The study of behavioral finance has best helped explain which of the following investor
behav- iors? (a) Investors are often unable to short-sell unfavorable stocks. (b) Investors often
create undiversified portfolios (c) Investors tend to sell their losing stocks and retain stocks that
have capital gains. (d) Investors are generally too slow to update their beliefs in the face of new
evidence 10. Briefly discuss some of the important findings of behavioral finance studies.
Solution
9) d is correct
Behavioral finance has been very helpful in explaining that inveatinv are too slow to update their
beliefs in the face of new evidences.
10) Behavioral finance has focused on two crucial areas and they are attitude towards risk and
beliefs about probability. It tells us that security mispricing can result from the investor's attitude
towards risk and how they asses probability. It deals with behaviour of investors at the time of
capital gain and capital loss. It tells us that investors are either risk averse or risk loving that is
they do not behave rationally.
