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How does regret avoidance contribute to the disposition effect?
What kind of steps do professional traders take to avoid holding losers?
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- How does/can a financial intermediary reduce the risk facing them due to Adverse Selection?What is overconfidence bias in investing? Give examples and how to overcome it. Thank you!What sorts of factors might limit the ability of rational investors to take advantage of any “pricing errors” that result from the actions of “behavioral investors”?
- Discuss how the free-rider problem aggravates adverse selection and moral hazard problems in financial markets.Why does behavioral finance considered investors as "normal" yet biased and errors? Support being subject to decision-makingWhat is the difference between future value and present value? Whichapproach is generally preferred by financial managers? Why?
- Why a risk taker (likes to take risk) type of investor prefer equities over fixed income?Even if behavioral biases do not affect equilibrium asset prices, why might it still be important for investors to be aware of them?Which strategy would be best for Kelly to deploy if she thinks the stock market will decline and she wants to protect the downside, while maintaining any upside if she is wrong about the market situation: a Protective puts b Covered calls c Zero-cost collars