5 Catherine is a savvy investor with investments across many different instruments, scattered in many different accounts. She also has several different investing goals from short-term to long-term. But she is smart enough to take into consideration the correlation between her assets. She allocates the assets according to her risk-return profile across different asset classes, viewing the investments as comprising a single portfolio with a single measure of risk. What behavioral trait would represent the opposite way of Catherine approaches investing? A. Conservatism bias B. Mental accounting C. Overconfidence bias D. Framing bias
5 Catherine is a savvy investor with investments across many different instruments, scattered in many different accounts. She also has several different investing goals from short-term to long-term. But she is smart enough to take into consideration the correlation between her assets. She allocates the assets according to her risk-return profile across different asset classes, viewing the investments as comprising a single portfolio with a single measure of risk. What behavioral trait would represent the opposite way of Catherine approaches investing? A. Conservatism bias B. Mental accounting C. Overconfidence bias D. Framing bias
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Catherine is a savvy investor with investments across many different instruments, scattered in many different
accounts. She also has several different investing goals from short-term to long-term. But she is smart
5
enough to take into consideration the correlation between her assets. She allocates the assets according to
her risk-return profile across different asset classes, viewing the investments as comprising a single portfolio
with a single measure of risk. What behavioral trait would represent the opposite way of Catherine
approaches investing?
A. Conservatism bias
B. Mental accounting
C. Overconfidence bias
D. Framing bias
The chart below illustrates most clearly which type of pattern?
21
19
E.
17
15
13
11
A. Triangle
D.
9
7
B. Triple top
Feb
96
C. Head and shoulders
D. Double bottom
A.
B.
Aug Feb Aug Feb Aug Feb Aug
96
97
97
98
98
99
99
B. Only I, II, and IV are correct.
All of the above
C. Only II, III, and IV are correct.
Technical analysis aims to :
1. Identify and describe past and present price movement.
II. Provide a descriptive representation of market action.
III. Help the investors determine the exact price level when reversal will occur in the market.
IV. Help the investors make inferences about potential price action based on the assumption that price
patterns repeat to some reasonable degree.
A. Only III and IV are correct.
Volume
All are correct.
19 26 02 09 16 23 30
2015
Nov 2015
What trading decision must a trader make based purely on the trend lines in the chart below?
Hold long positions
07 14 21 28 04 11 19 25 01
Dec 2015
Jan 2016
Close out long positions
Feb
00
C. Close out short positions
Aug
00
D. Trading decisions cannot be made by using trend lines
08 16 22 29 07 14 21 28
Feb 2016
Mar 2016
-34.00
33.00
-32.00
- 31.00
-30.00
Pompa 2014, 040-50 40
-29.00
-28.00
Feb
01
-27.00
- 26.00
-25.00
-24.00
Thousand
-4000
3000
- 2000
1000
6
7
8
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