Many active management strategies rely on valuation as a key determinant in decision making. Behavioral finance suggests:

Select one

A$.$ Undervaluation arises from extreme$/$excessive pessimism and overvaluation arises from overconfidence.

B$.$ Both overvaluation and undervaluation arise from illusion of knowledge.

C$.$ Overvaluation arises from familiarity while undervaluation arises from hindsight bias.

D$.$ Both overvaluation and undervaluation arise from framing.