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IHREE a) Compare the errors and biases approach to the origins of financial crises with the bounded rationality approach. (5 marks) b) Investors who are
IHREE a) Compare the errors and biases approach to the origins of financial crises with the bounded rationality approach. (5 marks) b) Investors who are overconfident believe that they can affect outcomes to a greater extent than they actually can. When this occurs, they will invest in projects or overinvest because of overconfidence bias. Discuss the concept of overconfidence and how this relates to investment failure and possible errors in investor decisions with the aid of Kenyan practical examples. (5 marks) (Total: 10 marks)
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