September 2013
Beginner
224 pages
3h 48m
English
Content preview from The Warren Buffett Way WorkbookBecome an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
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Chapter 6
The Psychology of Investing
Multiple-Choice Questions
1. Which of the following terms can be associated with human behavior related to investment decisions?
I. Erratic
II. Contradictory
III. Goofy
A. I and II
B. II and III
C. I and III
D. I, II, and III
2. Which of the following are important aspects for investors to study with respect to their investment decisions?
I. The psychology of misjudgment
II. Balance sheet analysis
III. Income statements
A. I and II
B. II and III
C. I and III
D. I, II, and III
3. According to Benjamin Graham, what is an investor’s worst enemy?
A. Stock market fluctuation
B. Oneself
C. An inefficient market
D. Lack of information
4. According to Warren Buffett, which of the following is not an important principle in Benjamin Graham’s investing approach?
A. A correct attitude about investing
B. The margin of safety concept
C. Looking at stocks as a business
D. The ability to predict stock market bottoms
5. What term is used to describe the investigative study that seeks to explain market inefficiencies by using psychological theories?
A. Behavioral finance
B. Efficient market theory
C. Inefficient market theory
D. Behavioral inefficiency
6. According to several psychological studies, what trait is associated with errors in judgment?
A. Lack of complete information
B. Overconfidence
C. Underconfidence
D. Using bad information
7. Studies by Richard Thaler from the University of Chicago have demonstrated which behavioral finance trait that leads ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.