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two Consider the following scenarios on the basis of behavioural finance. Scenario I. John always considered Proctor and Gamble a successful company with several successful

two

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Consider the following scenarios on the basis of behavioural finance. Scenario I. John always considered Proctor and Gamble a successful company with several successful products, however, its stock price drop in the last month convinced him that he should sell the stock. Scenario II. Adam and Anna are twins who invest in the stock market. Adam buys and sell stocks every week while Anna rebalances her portfolio every year. Which of the following is correct? a. Scenario I is consistent with conservatism bias; Scenario II is consistent with representativeness bias b. Scenario I is consistent with mental accounting; Scenario II is consistent with regret avoidance. c. Scenario I is consistent with forecasting errors; Scenario II is consistent with overconfidence

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