Successful financial management requires knowledge of not only the terminology, mathematics, and techniques of financial management, but also that of human psychology and sociology. Financial and economic history in general-and market bubbles in particular-are filled with examples of both rational and irrational behaviors. Which of the following behaviors are true characterizations of a market bubble and which are false? Behavior True False Market prices exhibit unexpectedly significant increases 0 0 Extremely low trading volumes vis-a-vis historical averages Market performance attracts new, often naive and inexperienced, investors and speculators into the market 0 0 The anchoring bias mong the irrational behaviors The field of behavioral finance tends to identify and explain irrational-but-predictable financial de that have been identified thus far are overconfidence, anchoring bias, hindsight bias, self-attribut vior. Loss aversion Read each of the definitions below and identify the behavior it describes: The self-attribution bias Herding behavior Definition Overconfidence People tend to underemphasize the relevance of past events when predicting future events. The hindsight bias People follow successful market participants and invest in assets that are performing well. People are overly sure of their own abilities compared to the abilities of other investors