Question $1$:

Compare and contrast traditional portfolio theory with behavioral portfolio theory. How does

behavioral portfolio theory account for investor preferences and biases? $(5$ marks$)$

Identify and explain five common behavioral biases that influence behavior. Provide real$-$world

examples of each bias. $(5$ marks$)$

Question $2$:

Discuss the advantages and disadvantages of the following financing methods. Under what

circumstances might a firm prefer one over the other?

$$ Hire purchase

$$ Lease

$($ Gearing adjustment $(10$ marks$)$