Ch.10 · Benchmarks and Performance Evaluation · medium
What is 'herding behaviour' in the context of mutual fund markets?
0% of students got this wrong
EXPLANATION
Herding behaviour occurs when investors follow the crowd rather than making independent judgments. During bull markets, herding drives excessive inflows into equity funds (often at market peaks), and during crashes, herding causes mass redemptions (at market troughs). SIP investors are less susceptible to herding since investments are automated regardless of market sentiment.
Practising Chapter 10 one question at a time?
Try the full chapter — 100 questions, tracked score, weak area breakdown.