2. choose whether each of the descriptions are either disposition effect, repres
ID: 2660233 • Letter: 2
Question
2. choose whether each of the descriptions are either disposition effect, representativeness bias, regret avoidance, conservatism bias or mental accounting.
a. Investors are slow to update their beliefs when given new evidence.
b. Investors are reluctant to bear losses due to their unconventional decisions.
c. Investors exhibit less risk tolerance in their retirement accounts versus their other stock accounts.
d. Investors are reluctant to sell stocks with "paper" losses.
e. Investors disregard sample size when forming views about the future from the past.
4.A high amount of short interest is typically considered as a __________ signal, and contrarians may consider it as a _________ signal.
5. Calculate breadth for the NYSE using the data in Figure 9.7.
Breadth
Explanation / Answer
1)overwhelmingly optimistic
2) a) conservatism bais
b)Regret avoidance
c)mental accounting
d) disposition effect
e)Representation bais
3)market momentum has become negative
4) bearish; bullish
5) breadth for Advancing -2787
Declining -270
Net Avancing- 2787-270 =2517
6) Bulllish
because as breadth is positive ,it is bullish signal
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