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Match the following words with their definitions (Note: There are more words than defini- tions, so some words will not be used): (a) Naive Diversification
Match the following words with their definitions (Note: There are more words than defini- tions, so some words will not be used): (a) Naive Diversification (b) Limits to Arbitrage (c) Representativeness (d) Cognitive Dissonance (e) Disposition Effect (f) Regret of Commission (g) Endowment Effect (h) Status Quo Bias (i) Herding (j) Framing (k) Familiarity (1) Prospect Theory (m) Regret of Ommission 1. Well-capitalized, rational traders may be unable to correct a mispricing 2. Tendancy to ignore information that conflicts with a positive self-image 3. Tendancy for people to choose certain options when framed in a positive domain and risky options when framed in a negative domain People demand more to sell an object than they are willing to buy the same 4. object 5. Selling winners too soon and holding losers too long 6. Judgement based on stereotypes 7. People's tendancy to keep what they have been given instead of exchanging it 8. Phrasing of a question has an impact on answers and decisions 9. Emotional pain that comes from realizing an action has turned out poorly 10. Many investors acting as a consensus
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