Question
Identify the most appropriate Investor Behaviour for the cases below, stating your justifications and solutions for each: (i) An investor visits his financial advisor with
Identify the most appropriate "Investor Behaviour" for the cases below, stating your justifications and solutions for each:
(i) An investor visits his financial advisor with the goal of building wealth but ended up leaving with a life insurance policy. (4 marks)
(ii) "Higher values tend to make us believe that it's a better deal." For instance, a 90 percent discount is better than a 50 percent discount. (4 marks)
(iii) Susan is a risk adverse investor. She believes that all stocks are risky as she was taught that a common stock is a risky investment. She refuses to invest in stocks even her financial advisor clarified to her that blue chip stocks are relatively low risk due to the financial stability of the company.
(4 marks)
(iv) Some investors tend to buy stocks of companies whose products they like, or whose products they use frequently. (4 marks)
Step by Step Solution
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Step: 1
i Behaviour Misplaced Trust The investor seems to have misplaced trust in the financial advisor who ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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