Behavioral Finance

Behavioral Finance

1) ________ is the field of study that applies concepts from social sciences such as psychology and sociology to help understand the behavior of securities prices.

A) Behavioral finance

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B) Strategical finance

C) Methodical finance

D) Procedural finance

2) If a market participant believes that a stock price is irrationally high, they may try to borrow stock from brokers to sell in the market and then make a profit by buying the stock back again after the stock falls in price. This practice is called

A) short selling.

B) double dealing.

C) undermining.

D) long marketing.

3) ________ means people are more unhappy when they suffer losses than they are happy when they achieve gains.

A) Loss fundamentals

B) Loss aversion

C) Loss leader

D) Loss cycle