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An investor consistently invests heavily in a particular sector based on old information, despite warnings about changes occurring in that industry. You are offered two
An investor consistently invests heavily in a particular sector based on old information, despite warnings about changes occurring in that industry. You are offered two investment options: the one with a ( 70 % ) chance of making a profit, and the other one with a ( 30 % ) chance of making a loss and you choose the first option because it seems a 1. Familiarity bias positive return. A new investor consistently 2. Loss aversion picks stocks based on their knowledge of the 3. Anchoring bias company's products or 4. Framing bias industry, even when objective data suggests other options may be more profitable.
An investor consistently holds onto dropping stocks hoping they will eventually recover, while quicky selling stocks that show even small gains (last option)
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