Question

Which of the following statement best describe the concept of loss-aversion?

1-the inability to mentally acknowledge a loss on a security.

2-the tendency to quickly sell any investment that has decreased in value

3-the reluctance to sell a security after it has decreased in value.

Which one of the following statements most accurate concerning confidence and trading activities among investors of different gender (self identify or otherwise)?

1-Men tend to trade less frequently than women.

2-Overconfidence tends to result in lower returns, especially among males.

3-Excessive trading tends to increase returns.

Answer 1

Hi

As per policy we will solve first question here.

Loss aversion is the tendency in which investor quickly lock in their gains but hold on to their losses. hence opton 3 "The rluctance to sell a security after is has decreased in value" is correct option here.

Thanks