Question
Which of the following choices are accurate descriptions of the differences between Modern Portfolio Theory (MPT) and Behavioral Finance (BF)? Check all that apply. a.
Which of the following choices are accurate descriptions of the differences between Modern Portfolio Theory (MPT) and Behavioral Finance (BF)? Check all that apply.
| a. | Investors are risk-averse in MPT, and they are also risk-averse in BF. | |
| b. | With MPT investors act in their own self-interests, while with BF investors act in the best interest of the market investors as a whole | |
| c. | With MPT investors seek to maximize utility while with BF investors seek to minimize regret. | |
| d. | With MPT securities are valued rationally and with BF securities are valued heuristically. | |
| e. | With MPT new information is priced accordingly, and with BF new information is not immediately priced into the security. | |
| f. | With MPT investors possess perfect information and with BF investors possess imperfect information. |
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Engineering Economy
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
15th edition
