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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

  
    

slightly overly optimistic overwhelmingly optimistic slightly overly pessimistic overwhelmingly pessimistic Stock market analysts have tended to be ___________ in their recommendations to investors. choose whether each of the descriptions are either disposition effect, representativeness bias, regret avoidance, conservatism bias or mental accounting. When the stock price falls below a moving average, a possible conclusion is that _____. A high amount of short interest is typically considered as a __________ signal, and contrarians may consider it as a _________ signal. Calculate breadth for the NYSE using the data in Figure 9.7. Is the signal bullish or bearish?

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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