Under prospect theory diminishing sensitivity function O investors will be more sensitive when their investment changes from 500 to 600 compared to from 0 to 100 investors tend to become less sensitive when facing huge losses O investors tend to hold stocks that are losing money to avoid realizing loss | investors seek big wins with very small probabilities.

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
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Under prospect theory diminishing sensitivity function
O investors will be more sensitive when their investment changes from 500 to 600 compared to from 0 to 100
investors tend to become less sensitive when facing huge losses
investors tend to hold stocks that are losing money to avoid realizing loss
investors seek big wins with very small probabilities.
Transcribed Image Text:Under prospect theory diminishing sensitivity function O investors will be more sensitive when their investment changes from 500 to 600 compared to from 0 to 100 investors tend to become less sensitive when facing huge losses investors tend to hold stocks that are losing money to avoid realizing loss investors seek big wins with very small probabilities.
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