Ch.12 · Matching Schemes to Investor Profiles · hard
What is 'confirmation bias' in the context of investment decision-making?
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EXPLANATION
Confirmation bias causes investors to seek information that validates their existing view — e.g., only reading bullish reports on a stock they own. This can prevent timely exits from underperforming schemes. Distributors should present balanced information and encourage objective review of portfolio holdings.
Practising Chapter 12 one question at a time?
Try the full chapter — 50 questions, tracked score, weak area breakdown.