1. According to the study by Barber and Odean who examined the trading behavior of 38,000 households of a large discount brokerage firm between 19911 and 1997, who trade the most frequently?

	a.	Married men
	b.	Married women
	c.	Single men
	d.	Single women

2. Psychologists have determined that overconfidence causes people to _______ their knowledge, _______ risks, and exaggerate their ability to control events.

	a.	overestimate, overestimate
	b.	underestimate, underestimate
	c.	overestimate, underestimate
	d.	underestimate, overestimate

3. Barder and Odean grouped the level of trading for the investors in their sample into five categories. They found that the lowest net annualized return is associated with the lowest portfolio turnover.

____True

____ False

4. Which of the following is not an attribute that fosters the illusion of control?

	a.	Choice
	b.	Task familiarity
	c.	Regret
	d.	Active involvement
	e.	Information

5. Which of the following is not related to overconfidence?

	a.	The better-than-average effect
	b.	Miscalibration
	c.	The worse-than-average effect

6. Because investors tend to be overconfident, we often observe that higher trading volume follow months with low returns in stock market.

____True

____ False

7. Unusually high numbers of postings on the message board (such as that on Yahoo Finance or Ragingbull.com) are associated with higher trading volume. A study finds that _____ message board postings at RagingBull.com _____ associated with positive stock returns the following day or week

	a.	negative, are
	b.	negative, are not
	c.	positive, are
	d.	positive, are not

8. The portfolios of overconfident investors will have higher risk for two reasons. First is the tendency to purchase ______ stocks, which include smaller, newer companies. The second reason is a tendency to ______ their portfolios.

	a.	higher-risk, overdiversify
	b.	lower-risk, overdiversify
	c.	lower-risk, overdiversify
	d.	higher-risk, underdiversify

9. Barder and Odean examined the performance of the investors before and after going online. They find that because investors traded ______ after going online, the total return of their portfolios went down by ____ % compared to that from the phone-based trading.

	a.	more frequently, 8
	b.	more freqently, 5.9
	c.	less freqently, 2.35
	d.	less freqently, 5.9

10. Which of the following bias leads people to believe that successes are attributed to skill while failure is caused by bad luck?

	a.	Ease of recall.
	b.	The hindsight bias.
	c.	The self-attribution bias.
	d.	The confirmation trap.