Question

An investor has a large portion of his retirement portfolio in his employer’s stock. He believes the stock price will go up because it has been doing fairly well so far. He trusts his own choice because he has performed well in investing recently.
Which of the following is NOT a strong influence of his investing decision?

	A.	Overconfidence
	B.	Representativeness bias
	C.	Regret of omission
	D.	Familiarity bias

Answer 1

Hello Sir / Mam

Your required answer is option C : Regret of omission

• Overconfidence as he is not thinking about what will happen if his prediction fails.
• Familiarity Basis because he believes that he knows much about the company and he is familiar with its policies, ideas, vision and mission.
• Representativeness Bias as he trusts his choice too much based on past results of his investing.

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