1. Charlie has been trading in stocks on a very short term basis for several months. Although he had good results at first, the volume of his activity created significant trading costs and he has recently been incurring losses regularly. He continues to trade frequently regardless of the outcome because of the adrenaline rush associated with day trading. Which emotional bias is he committing?

A) Self-control bias

B) Clustering illusion

C) Irrational escalation

D) Optimism bias

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2. The most likely violation of the modern portfolio theory assumptions is:

A) Investors making rational decisions

B) Institutional investors having no impact on prices even when making large trades

C) Individual investors facing bid and ask prices when they trade

D) All investors being able to borrow at the risk-free rate of interest

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3. A market in which an investor forms a well-diversified portfolio by using only the CEO's degree and university attended to consistently outperform the relevant benchmark is most likely:

A) Inefficient

B) Weak form efficient

C) Semi-strong form efficient

D) Strong form efficient