Behavioral finance True or false? a. Most managers tend to be overconfident. b. Psychologists have found that, once people have suffered a loss, they are more relaxed about the possibility of incurring further losses. c. Psychologists have observed that people tend to put too much weight on recent events when forecasting . d. Behavioral biases open up the opportunity for easy arbitrage profits.

Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)

12th Edition

ISBN: 9781259144387

Author: Richard A Brealey, Stewart C Myers, Franklin Allen

Publisher: McGraw-Hill Education

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Chapter 13, Problem 6PS

Behavioral finance True or false?

a. Most managers tend to be overconfident.
b. Psychologists have found that, once people have suffered a loss, they are more relaxed about the possibility of incurring further losses.
c. Psychologists have observed that people tend to put too much weight on recent events when forecasting.
d. Behavioral biases open up the opportunity for easy arbitrage profits.

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Chapter 13, Problem 5PS

Chapter 13, Problem 7PS

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Solution Summary: The author explains whether the given statements are true or false. The false options are as follows: Over confidence is consider as systematic bias.

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