What should you do as a financial advisor if you believe that a client’s heuristic is clouding her or his judgment? Provide a specific example in addition to your general response.

Question 2: Identify and describe some differences between a rational investor and a normal one. Why is knowing this difference as a financial planner important?

Question 3: Are investment principles (guidelines, standards, assumptions) based on rational or irrational investors? Do you agree this is a good approach? Why or why not?

Question 4: The best discussions with clients come when questions are framed as open-ended questions. What are the benefits and the drawbacks to asking a client “why”?