Question 1

Why,according to the chapter,do investors fail to compare their investment decisions to the overall market performance?

Accepted Answer

this is because investors want to justify their past behaviors and protect their overly optimistic views of their investments.

Question 2

Over time,the performance of mutual funds tends to:

Accepted Answer

A) Improve. 
B) Decline. 
C) Regress to the mean. 
D) Outperform the market. 
A) Improve. 
B) Decline. 
C) Regress to the mean. 
D) Outperform the market. C

Question 3

The basic advantage of index funds over actively managed mutual funds is that:

Accepted Answer

A) They have a higher likelihood of outperforming the market. 
B) They will always yield a profit,however small. 
C) Their operating fees are lower. 
D) All of the above. 
A) They have a higher likelihood of outperforming the market. 
B) They will always yield a profit,however small. 
C) Their operating fees are lower. 
D) All of the above. C

Question 4

The _____________ bias makes people resistant to change and drives them to prefer investment strategies that they have used in the past over searching for better strategies.

Accepted Answer

The answer of The _____________ bias makes people resistant to...

Question 5

An investor should avoid buying a diversified portfolio of stocks,since it may lead to excessive spending.

Accepted Answer

A) True 
 B)False

Question 6

While investors accurately estimate the past performance of the stocks in which they invest,they hold overly optimistic beliefs about these stocks' future performance.

Accepted Answer

A) True 
 B)False

Question 7

When a fund outperforms the market two years in a row,investors often neglect to consider the likelihood that this result may be due to _____________.

Accepted Answer

randomness

Question 8

When firms offer their employees a choice of investment options for retirement accounts,the percentage of dollars employees choose to invest in stocks in highly correlated with what?

Accepted Answer

the percen

Question 9

Why are annuities regarded as no-risk saving schemes?

Accepted Answer

According to this type of plan,the perso

Question 10

When Samuelson and Zeckhauser (1988)offered their participants to allocate their inheritance money between different options,participants displayed a consistent preference to invest in:

Accepted Answer

A) Risky stock. 
B) Municipal bonds. 
C) The same manner the money was previously invested. 
D) None of the above 
A) Risky stock. 
B) Municipal bonds. 
C) The same manner the money was previously invested. 
D) None of the above

Question 11

Roughly what is the percentage of mutual funds will outperform the market both this year and the next year?

Accepted Answer

A) Around 50% 
B) Around 25% 
C) Around 6% 
D) Around 0.1% 
A) Around 50% 
B) Around 25% 
C) Around 6% 
D) Around 0.1%

Question 12

People probably do not invest enough in:

Accepted Answer

A) Stocks in the long-term. 
B) Bonds in the short-term. 
C) Recent market losers. 
D) Recent market winners. 
A) Stocks in the long-term. 
B) Bonds in the short-term. 
C) Recent market losers. 
D) Recent market winners.

Question 13

When Moore and his colleagues examined investor behavior in the lab,the participants behaved similar to investors in real markets - they chose too many actively managed funds that made too many trades and charged high fees.

Accepted Answer

A) True 
 B)False

Question 14

On average,actual returns of stocks picked by women are higher than returns of stocks picked by men.

Accepted Answer

A) True 
 B)False

Question 15

In order to come out to themselves as "winners" and to avoid becoming "losers",investors tend to:

Accepted Answer

A) Hold on to stocks that are trading below purchase price. 
B) Buy recent market winners. 
C) Engage in frequent trade. 
D) Implement the same investment strategies that they have used in the past. 
A) Hold on to stocks that are trading below purchase price. 
B) Buy recent market winners. 
C) Engage in frequent trade. 
D) Implement the same investment strategies that they have used in the past.

Question 16

The fact that the benefits of saving for retirement occur only in the distant future makes it easy for the _______ _______ to dominate people's decisions and to cause them to save less.

Accepted Answer

The answer of The fact that the benefits of saving...

Question 17

From a strictly rational standpoint,the price at which a stock was purchased should be regarded as:

Accepted Answer

A) A reference point for judging gains and losses. 
B) An indication of the stock's past performance 
C) A helpful guide to avoid impatient trading of the stock. 
D) Arbitrary and meaningless. 
A) A reference point for judging gains and losses. 
B) An indication of the stock's past performance 
C) A helpful guide to avoid impatient trading of the stock. 
D) Arbitrary and meaningless.

Question 18

What change does the chapter offer to make in 401(k)savings plans in order to raise their enrollment rates?

Accepted Answer

to implement an auto

Question 19

After making an investment,people's estimations of its past performance become overly ___________.

Accepted Answer

The answer of After making an investment,people's estimations of its...

Question 20

In what way does overconfidence lead people to engage in active investing?

Accepted Answer

people are excessively sure th

Why,according to the chapter,do investors fail to compare their investment decisions to the overall market performance?

Over time,the performance of mutual funds tends to:

The basic advantage of index funds over actively managed mutual funds is that:

The _____________ bias makes people resistant to change and drives them to prefer investment strategies that they have used in the past over searching for better strategies.

An investor should avoid buying a diversified portfolio of stocks,since it may lead to excessive spending.

While investors accurately estimate the past performance of the stocks in which they invest,they hold overly optimistic beliefs about these stocks' future performance.

When a fund outperforms the market two years in a row,investors often neglect to consider the likelihood that this result may be due to _____________.

When firms offer their employees a choice of investment options for retirement accounts,the percentage of dollars employees choose to invest in stocks in highly correlated with what?

Why are annuities regarded as no-risk saving schemes?

When Samuelson and Zeckhauser (1988)offered their participants to allocate their inheritance money between different options,participants displayed a consistent preference to invest in:

Roughly what is the percentage of mutual funds will outperform the market both this year and the next year?

People probably do not invest enough in:

When Moore and his colleagues examined investor behavior in the lab,the participants behaved similar to investors in real markets - they chose too many actively managed funds that made too many trades and charged high fees.

On average,actual returns of stocks picked by women are higher than returns of stocks picked by men.

In order to come out to themselves as "winners" and to avoid becoming "losers",investors tend to:

The fact that the benefits of saving for retirement occur only in the distant future makes it easy for the _ _ to dominate people's decisions and to cause them to save less.

From a strictly rational standpoint,the price at which a stock was purchased should be regarded as:

What change does the chapter offer to make in 401(k)savings plans in order to raise their enrollment rates?

After making an investment,people's estimations of its past performance become overly ___________.

In what way does overconfidence lead people to engage in active investing?

Introduction to Managerial Decision Making

Overconfidence

Common Biases

Bounded Awareness

Framing and the Reversal of Preferences

Motivational and Emotional Influences on Decision Making

The Escalation of Commitment

Fairness and Ethics in Decision Making

Making Rational Decisions in Negotiations

Negotiator Cognition

Improving Decision Making

Filters

Exam 9: Common Investment Mistakes

Why,according to the chapter,do investors fail to compare their investment decisions to the overall market performance?

Over time,the performance of mutual funds tends to:

The basic advantage of index funds over actively managed mutual funds is that:

The _____________ bias makes people resistant to change and drives them to prefer investment strategies that they have used in the past over searching for better strategies.

An investor should avoid buying a diversified portfolio of stocks,since it may lead to excessive spending.

While investors accurately estimate the past performance of the stocks in which they invest,they hold overly optimistic beliefs about these stocks' future performance.

When a fund outperforms the market two years in a row,investors often neglect to consider the likelihood that this result may be due to _____________.

When firms offer their employees a choice of investment options for retirement accounts,the percentage of dollars employees choose to invest in stocks in highly correlated with what?

Why are annuities regarded as no-risk saving schemes?

When Samuelson and Zeckhauser (1988)offered their participants to allocate their inheritance money between different options,participants displayed a consistent preference to invest in:

Roughly what is the percentage of mutual funds will outperform the market both this year and the next year?

People probably do not invest enough in:

When Moore and his colleagues examined investor behavior in the lab,the participants behaved similar to investors in real markets - they chose too many actively managed funds that made too many trades and charged high fees.

On average,actual returns of stocks picked by women are higher than returns of stocks picked by men.

In order to come out to themselves as "winners" and to avoid becoming "losers",investors tend to:

The fact that the benefits of saving for retirement occur only in the distant future makes it easy for the _______ _______ to dominate people's decisions and to cause them to save less.

From a strictly rational standpoint,the price at which a stock was purchased should be regarded as:

What change does the chapter offer to make in 401(k)savings plans in order to raise their enrollment rates?

After making an investment,people's estimations of its past performance become overly ___________.

In what way does overconfidence lead people to engage in active investing?

Introduction to Managerial Decision Making

Overconfidence

Common Biases

Bounded Awareness

Framing and the Reversal of Preferences

Motivational and Emotional Influences on Decision Making

The Escalation of Commitment

Fairness and Ethics in Decision Making

Making Rational Decisions in Negotiations

Negotiator Cognition

Improving Decision Making

Filters

The fact that the benefits of saving for retirement occur only in the distant future makes it easy for the _ _ to dominate people's decisions and to cause them to save less.