Question
Which scenario below is the best example of the overconfidence bias? a) John has taken two online courses on technical analysis. He stumbled across tradingview.com
Which scenario below is the best example of the overconfidence bias?
a) John has taken two online courses on technical analysis. He stumbled across tradingview.com and has been using this approach to invest his RobinHood account ever since. He noticed what he thinks is favorable price action on a stock that he is following. He put half of his $5,000 trading account into this stock.
b) Peter has been playing with penny stocks for about a year. He has seen some positions make a bunch of money and some lose a bunch (in relative terms). He read a newsletter that talked about a new biotech firm working on a topical vaccine delivery method. If the process is approved by the FDA, then this stock could have a major impact on society. If the process is not approved, then it will likely go out of business. Peter considers this information and decides to invest based on a hunch.
c) Allison has been following the industrial paints industry for a while. Her dad works as an engineer in the industry and it sparked an awareness and interest in her. She finds a start-up company that invented a new application process (patent pending). She invests 10% of her portfolio in this company.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started