4 Behavioral finance and investment decisions Flashcards
1
Q
What is the characteristic of an emotional investor?
A
- doesn’t pursue a strategy
- forms adaptive expectations
- overestimates his risk tolerance
- happens to buy when stock prices are high and sell when they are low
- wastes a lot of money
2
Q
What kinds of emotions exist?
A
- greed and fear
- pride and regret
- suprise
3
Q
Which mistakes belong to the information processing mistakes?
A
- availability heuristic
- representatives heuristic
- gambler’s fallacy
- anchoring effects
- framing
- probability matching
- overconfidence (better than the average)
4
Q
Which mistakes belong to the information selection mistakes?
A
- attention mistakes
5
Q
Which mistakes belong to the decision mistakes?
A
- wealth selection mistakes
