1) Investors tend to ________ stocks that have ________ since the time of purchase.

A) hold on to; have lost value

B) sell; have lost value

C) hold on to; have risen in value

D) none of the above

Answer:

2) Stock returns tend to be ________ when it is a ________ at the location of the stock exchange.

A) higher; rainy day

B) lower; sunny day

C) higher; sunny day

D) lower; rainy day

Answer:

3) Investors appear to put too ________ weight on ________ rather than considering ________.

A) little; their own experience; all the historical evidence

B) much; their own experience; all the historical evidence

C) little; historical evidence; their own experience

D) much; historical evidence; their own experience

Answer:

4) The phenomenon in which individuals imitate each other's actions, is referred to as:

A) herd behaviour

B) the cascade effect

C) the disposition effect

D) sensation seeking

Answer:

5) The phenomenon in which individuals believe others have superior information which they can take advantage of by copying their trades is referred to as:

A) herd behaviour

B) the cascade effect

C) the disposition effect

D) sensation seeking

Answer: