Escalation bias refers to the situation where Investors put more money into a fa
ID: 2816389 • Letter: E
Question
Escalation bias refers to the situation where
Investors put more money into a failure rather than into a success.
Investors ignore bad news and overemphasize good news.
Investors have a propensity to sell winners too soon and hang on to losers too long.
Investors tend to follow the herd.
A.Investors put more money into a failure rather than into a success.
B.Investors ignore bad news and overemphasize good news.
C.Investors have a propensity to sell winners too soon and hang on to losers too long.
D.Investors tend to follow the herd.
Explanation / Answer
Escalation bias refers to the situation where
correct answer : Investors put more money into a failure rather than into a success.
(THUMBS UP PLEASE)
EXPLANATION : This concept is a part of Behavioral Finance. Investors do not accept the mistake that they have made mistake. Instead, they put more money in poorly performed asset. They igone the bad news and invest in the stocks more & more
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