Please help me about question 3

Zara Chin is the Managing Director (MD) and Head of Wealth Management for a large APAC Private Bank based in Singapore. Zara has recently employed a new Director and Head of Client Relationship Kenny Powar from a leading competitor. Kenny has a strong track record of training staff and educating clients on behavioural finance and the implications for investments. Zara and Kenny have access to a large and diversified team of investment specialists including economists, investment bankers, investment consulting specialist teams across multiple asset classes and third-party fund managers on their approved product list (APL). They need to give advice to a large Family Office client. The Family Office client recently (in 2021) transitioned over the control of the organisation to the third generation (3) with the only child Jason Tan now in control. In 2022 he proceeded to change long standing and experienced investment committee (IC) given their recommendations to begin to sell down the equity weighting and some private market (PE and VC) assets and protect capital following 3 consecutive years of returns well above (multiple times) expected returns. It is 2023 and the world economy has been expanding since the great March 2020 pandemic induced reset. The Family Office has a 95% weight to growth assets with 50% in one equity strategy They have achieved a total return of 25% annualised over the past four years with most of the returns coming in 2020-21. They have been conditioned to expect these returns going forward given that growth and risk assets have benefited so much following the historical monetary and fiscal policy stimulus since March 2020. The clients also references that some of their peers and contacts believe a high concentration to equities and some gearing makes sense. The investment committee for the Family Office has been restructured by the new younger generation leadership. They have also started to explore gearing on their equity exposure and have begun to engage global prime brokers (Morgan Stanley, Credit Suisse, UBS, Goldman Sachs and Deutsche Bank). Question 1: Which four of the seven behavioural traps for investors does the Family Office client exbibit? [4 marks] Question 2: What is the expected return (ER) targets for the equity asset class over time? How frequent over the long run are annual negative returns for equities over the long run? [2 marks] Question 3: What are some of the portfolio implications of herd behaviour and group dynamics (4 marks] Total (10 marks)