IAI CM2 Practice Questions - IAI Subject CM2 Financial Engineering And Loss Reserving Exam

Behavioural finance challenges the EMH by documenting systematic biases. 'Anchoring' refers to which tendency?

Overweighting recent information when forecasting Holding losing investments too long to avoid realising a loss Following the actions of a crowd rather than independent analysis Relying too heavily on an initial reference value when making estimates

Correct Answer:

Relying too heavily on an initial reference value when making estimates

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