Question
-An advisor for Alesi Capital Managment is owrking with a new client, Melanie Stoffer. Prior to meeting with her, the advisor asks Stoffer a series
-An advisor for Alesi Capital Managment is owrking with a new client, Melanie Stoffer. Prior to meeting with her, the advisor asks Stoffer a series of diagnostic qeustions to determine whether she may have any of the following investment behavioral biases:
Anchoring
Hindsight
Regret aversion
Representativeness
Satus quo
- The diagnostic questions are as follows:
- 1. Would a prior investment decision that resulted in a loss stop you from making a similar decision, even if the new invsetment appears to be the best alternative?
-2. How frequently do you review your investment portfolio?
-3. would you sell a recent equity investment following a management annoucement of a significant decline in the expected growth rate of revenue?
Identify the behavioral bias that each diagnostic question is most likely to reveal. (Note: each diagnostic question is designed to reveal a differnet bias.)
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