I am finding that the psychology section is driving me nuts. Going over the practice questions, they are so vague and open to interpretation. When they give a condition and ask you to identify the proper behavior, there are probably a number of different behaviours you can quote and not be sure which is the right one. I find representativeness is the worst offender since it is so vague and difficult to put a solid definition to. Who has mastered Behavioral finance and can lend me some wisdom so that I too may master it.
anyone claiming to have mastered this section is falling into an overconfidence psychological trap
agreed representativeness is based on stereotypes …but is so malleable you can use it to argue he is exhibiting representativeness since he expects past performace results to continue in future
If we all mastered Behavioral Finance, we would have no need to study it. If overconfidence and prudence are the two ends of the spectrum, I’m in between. But I am still exposed to heuristic bias, so I, as an investor, have no choice but ASKing help from PROfessionals.
I always think that I can not understand those terms (and sometimes their differences) clearly just because English is not my native language. Is behavioral finance also difficult for candidate who’s native language is English ?
Its not knowledge of English that is the limitation here. sometimes it appears vague , and not very different among the choices
janakisri Wrote: ------------------------------------------------------- > Its not knowledge of English that is the > limitation here. sometimes it appears vague , and > not very different among the choices I feel more comfortable with behavioral finance now. Thank you !