Ch.10 · Risk Measures and Ratios · medium
What is 'overconfidence bias' in the context of mutual fund investing?
0% of students got this wrong
EXPLANATION
Overconfidence bias leads investors to believe they can consistently pick the best funds or time market entries/exits better than they actually can. This results in frequent scheme switches (churning), attempts to time markets, and dismissal of professional advice. Research consistently shows that investors who trade less and stay invested longer earn better returns.
Practising Chapter 10 one question at a time?
Try the full chapter — 100 questions, tracked score, weak area breakdown.