6. Which of the following is a type (are types) of overconfidence? a. Illusion of control b. Excessive optimism c. Miscalibration d. All of the above. 7. In relation to Bayes Theorem, below, which of the following is a characterisation of the representativeness bias? P(BA).P(A) P(AB) = P(B) a. Underweighting P(B|A) and overweighting P(A) b. Underestimating P(B) C. Overweighting P(B|A) and underweighting P(A) d. Overweighting P(B|A) and underestimating P(B) 8. Prospect Theory was originally proposed by which pair of scholars? a. John von Neumann and Oskar Morgenstern b. Daniel Kahneman and Amos Tversky C. Eugene Fama and Kenneth French d. Malcolm Baker and Jeffrey Wurgler 9. Loss aversion may provide a partial explanation for which of the following? a. The St Petersburg paradox b. The equity premium puzzle C. The link between positive skewness in stock returns and overpricing d. The lack of international diversification in investors' portfolios 10. Which of the following statements best describes why agency problems might limit arbitrage activity? a. Because fund managers (as agents) are pressured to perform over the short- term, they are more likely to ride with, than against, a bubble. b. Because fund managers (as agents) are investing other people's money, there is little incentive to generate abnormal returns by conducting arbitrage. C. Because companies' managers (as agents) are hostile towards arbitrageurs, they withhold dividends from shareholders if arbitrage has occurred. d. Because companies' managers (as agents) typically prefer their company's stock to be overpriced, they provide overly-optimistic information to retail investors. 11. Which of the following is thought to provide a close estimate of the fundamental value of each share in a closed-end fund? a. The closed-end fund premium/discount b. The premium paid by investors at IPO c. The overall Net Asset Value of the fund d. The per-share Net Asset Value