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Some economists believe that the anomalies literature is consistent with investors' Multiple Choice ability to always process information correctly, and therefore, they infer correct probability
Some economists believe that the anomalies literature is consistent with investors' Multiple Choice ability to always process information correctly, and therefore, they infer correct probability distributions about future rates of return; and given a probability distribution of returns, they often make inconsistent or suboptimal decisions. ability to always process information correctly, and therefore, they infer correct probability distributions about future rates of return; and given a probability distribution of returns, they always make consistent and optimal decisions. inability to always process information correctly, and therefore, they infer incorrect probability distributions about future rates of return; and given a probability distribution of returns, they often make inconsistent or suboptimal decisions. inability to always process information correctly, and therefore, they infer incorrect probability distributions about future rates of return; and given a probability distribution of returns, they always make consistent and optimal decisions. An example of is that it is not as painful to have purchased a blue-chip stock that decreases in value as it is to lose money on an unknown start-up firm. Multiple Choice regret avoidance conservatism mental accounting overconfidence
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