Bộ 100 câu hỏi trắc nghiệm môn tài chính hành vi bằng tiếng anh

A Comprehensive Flyer for Students

Instructor: [Your Name]

Course: Behavioral FinanceDate: May 04, 2025

Designed for exam preparation and classroom discussion

This flyer contains 100 multiple-choice questions (MCQs) on Behavioral Finance, organized into fivekey topics to facilitate learning and exam preparation Each question includes four answer options and

a detailed explanation to enhance understanding Topics include Foundations of Behavioral Finance,Cognitive Biases, Heuristics, Prospect Theory, and Market Anomalies

Topic 1: Foundations of Behavioral Finance (Questions 1–20)

Question 1

What is the primary focus of behavioral finance?

a) Maximizing shareholder value

b) Understanding psychological influences on financial decisions

c) Analyzing macroeconomic trends

d) Developing algorithmic trading strategies

Answer: b) Understanding psychological influences on financial decisions

Explanation: Behavioral finance examines how psychological factors, such as emotions and

bi-ases, affect financial decisions, challenging the assumption of fully rational investors in traditionalfinance

Question 2

Which theory assumes investors are fully rational?

a) Prospect Theory

b) Efficient Market Hypothesis

c) Behavioral Portfolio Theory

d) Mental Accounting

Answer: b) Efficient Market Hypothesis

Explanation: The Efficient Market Hypothesis (EMH) assumes markets are efficient because

investors act rationally, incorporating all available information into prices Behavioral financecritiques this by highlighting irrational behaviors

Question 3

Who are considered the pioneers of behavioral finance?

a) Eugene Fama and Kenneth French

b) Daniel Kahneman and Amos Tversky

c) Harry Markowitz and William Sharpe

d) Robert Shiller and Richard Thaler

Answer: b) Daniel Kahneman and Amos Tversky

Explanation: Kahneman and Tversky developed Prospect Theory, a cornerstone of behavioral

finance, demonstrating how people make decisions under uncertainty based on perceived gainsand losses

Behavioral finance differs from traditional finance by emphasizing:

a) Mathematical modeling

b) Psychological factors

c) Market equilibrium

d) Risk-free rates

Answer: b) Psychological factors

Explanation: Unlike traditional finance, which assumes rational behavior, behavioral finance

focuses on psychological influences like biases and emotions that lead to irrational financialdecisions

Question 5

Which of the following is a key assumption of traditional finance?

a) Investors are risk-averse and rational

b) Investors are influenced by emotions

c) Markets are always inefficient

d) Prices are driven by herd behavior

Answer: a) Investors are risk-averse and rational

Explanation: Traditional finance assumes investors are rational, make decisions to maximize

utility, and are risk-averse, while behavioral finance highlights deviations due to psychologicalfactors

Question 6

What does behavioral finance suggest about market efficiency?

a) Markets are always fully efficient

b) Markets can be inefficient due to psychological biases

c) Markets are unaffected by investor behavior

d) Markets are only efficient in the short term

Answer: b) Markets can be inefficient due to psychological biases

Explanation: Behavioral finance argues that psychological biases, such as overconfidence or

herd behavior, can lead to mispriced assets, causing market inefficiencies

Question 7

Which concept in behavioral finance explains why investors hold diversified lios differently?

portfo-a) Mental Accounting

b) Efficient Market Hypothesis

c) Capital Asset Pricing Model

d) Arbitrage Pricing Theory

Answer: a) Mental Accounting

Explanation: Mental Accounting refers to how investors categorize and treat money differently

(e.g., separating investment portfolios into ”safe” and ”risky” buckets), affecting diversificationdecisions

Behavioral finance is most concerned with deviations from:

a) Expected utility theory

b) Technical analysis

c) Fundamental analysis

d) Portfolio optimization

Answer: a) Expected utility theory

Explanation: Behavioral finance studies how investors deviate from expected utility theory,

which assumes rational decision-making, due to biases and heuristics

Answer: c) Risk-free arbitrage

Explanation: Behavioral finance focuses on psychological factors, biases, and market anomalies,

not risk-free arbitrage, which is more aligned with traditional finance

Question 10

How does behavioral finance explain stock market bubbles?

a) Through rational pricing models

b) Through psychological biases like herd behavior

c) Through government regulations

d) Through perfect information flow

Answer: b) Through psychological biases like herd behavior

Explanation: Behavioral finance attributes bubbles to biases like herd behavior, where investors

follow the crowd, driving prices beyond fundamental values

Answer: b) Mental Accounting

Explanation: Mental Accounting explains why investors treat money differently based on its

source (e.g., spending windfall gains more freely than earned income)

What role does emotion play in behavioral finance?

a) It has no impact on financial decisions

b) It drives irrational investment choices

c) It ensures market efficiency

d) It simplifies portfolio management

Answer: b) It drives irrational investment choices

Explanation: Emotions like fear or greed can lead to irrational decisions, such as panic selling

during crashes or overbuying during bubbles

Question 13

Which of the following is a criticism of the Efficient Market Hypothesis by behavioral finance?

a) It ignores transaction costs

b) It overlooks psychological biases

c) It assumes constant interest rates

d) It relies on historical data

Answer: b) It overlooks psychological biases

Explanation: Behavioral finance criticizes EMH for ignoring biases like overconfidence or loss

aversion, which cause deviations from rational pricing

Question 14

What is the significance of bounded rationality in behavioral finance?

a) It assumes investors have unlimited cognitive capacity

b) It explains decision-making with limited information and cognitive resources

c) It supports the idea of perfect market efficiency

d) It focuses on algorithmic trading

Answer: b) It explains decision-making with limited information and cognitive resources

Explanation: Bounded rationality, proposed by Herbert Simon, suggests investors make

deci-sions with limited information and cognitive capacity, leading to suboptimal choices

Answer: b) Availability Bias

Explanation: Availability Bias causes investors to overemphasize recent or easily recalled

in-formation (e.g., news), leading to overreactions in trading

How does behavioral finance view the role of heuristics?

a) As complex analytical tools

b) As mental shortcuts leading to biases

c) As guarantees of rational decisions

d) As irrelevant to investor behavior

Answer: b) As mental shortcuts leading to biases

Explanation: Heuristics are mental shortcuts that simplify decision-making but often lead to

biases, such as overestimating probabilities based on recent events

d) Dividend discount models

Answer: b) Stock market bubbles

Explanation: Stock market bubbles are driven by behavioral phenomena like herd behavior

and overconfidence, which behavioral finance seeks to explain

Question 18

What does behavioral finance suggest about investor risk preferences?

a) They are always consistent and rational

b) They vary based on psychological factors

c) They are fixed across all market conditions

d) They are solely based on expected returns

Answer: b) They vary based on psychological factors

Explanation: Behavioral finance shows that risk preferences are influenced by psychological

factors, such as loss aversion or framing effects, leading to inconsistent choices

Answer: a) Confirmation Bias

Explanation: Confirmation Bias leads investors to seek and prioritize information that confirms

their existing beliefs, ignoring contradictory evidence

Why is behavioral finance relevant to financial advisors?

a) It simplifies portfolio optimization

b) It helps understand client biases and emotions

c) It eliminates market volatility

d) It focuses on technical analysis

Answer: b) It helps understand client biases and emotions

Explanation: Behavioral finance equips advisors to recognize client biases (e.g., loss aversion)

and emotions, enabling better guidance in investment decisions

Topic 2: Cognitive Biases (Questions 21–40)

Explanation: Overconfidence bias causes investors to overestimate their knowledge or predictive

abilities, often leading to excessive trading or risk-taking

Answer: b) Anchoring Bias

Explanation: Anchoring occurs when investors fixate on initial information (e.g., a stock’s past

price) and adjust insufficiently, impacting their decisions

Answer: a) Confirmation Bias

Explanation: Confirmation Bias leads investors to favor information that aligns with their

beliefs, potentially ignoring contradictory data (e.g., positive news about a favored stock)

An investor believes a past event was predictable after it occurs This is an example of:

a) Overconfidence

b) Hindsight Bias

c) Loss Aversion

d) Anchoring

Answer: b) Hindsight Bias

Explanation: Hindsight Bias causes investors to view past events as more predictable than

they were, leading to overconfidence in future predictions

Answer: a) Self-Attribution Bias

Explanation: Self-Attribution Bias causes investors to credit successful trades to their skill but

blame losses on external factors, reinforcing overconfidence

Answer: b) Availability Bias

Explanation: Availability Bias leads investors to overweight recent, memorable events (e.g., a

crash), skewing their perception of the stock’s value

Answer: a) Herd Behavior

Explanation: Herd Behavior occurs when investors mimic the actions of others, often during

market rallies or crashes, leading to amplified volatility

An investor overestimates a company’s value based on its similarity to a successful firm This is:

a) Representativeness Bias

b) Anchoring Bias

c) Overconfidence

d) Confirmation Bias

Answer: a) Representativeness Bias

Explanation: Representativeness Bias leads investors to judge a company’s potential based on

its resemblance to another (e.g., assuming a tech startup will succeed like Apple)

Answer: a) Loss Aversion

Explanation: Loss Aversion makes investors reluctant to sell losing investments to avoid the

emotional pain of realizing a loss

Answer: a) Confirmation Bias

Explanation: Confirmation Bias causes investors to disregard information (e.g., negative news)

that contradicts their belief in a stock’s potential

Explanation: Overconfidence leads investors to believe they can outperform the market,

re-sulting in frequent trading and higher transaction costs

An investor bases a decision on a stock’s price a year ago This reflects:

a) Anchoring Bias

b) Availability Bias

c) Confirmation Bias

d) Hindsight Bias

Answer: a) Anchoring Bias

Explanation: Anchoring Bias occurs when investors fixate on a past price (e.g., last year’s

stock price) as a reference point, skewing their valuation

Answer: a) Availability Bias

Explanation: Availability Bias leads investors to overestimate rare events (e.g., market crashes)

if they are recent or vivid in memory

Answer: a) Representativeness Bias

Explanation: Representativeness Bias causes investors to make assumptions based on

stereo-types (e.g., all stocks in a declining industry will fail), ignoring specifics

Answer: a) Herd Behavior

Explanation: Herd Behavior drives investors to sell during downturns, following the crowd’s

panic, often exacerbating market declines

An investor believes their successful trade was due to skill, not luck This reflects:

a) Self-Attribution Bias

b) Loss Aversion

c) Availability Bias

d) Anchoring

Answer: a) Self-Attribution Bias

Explanation: Self-Attribution Bias leads investors to attribute wins to skill and losses to

ex-ternal factors, reinforcing risky behavior

Answer: c) Availability Bias

Explanation: Availability Bias makes successes more memorable, skewing investors’ perceptions

of their track record

Answer: a) Loss Aversion

Explanation: Loss Aversion causes investors to become overly cautious after losses, avoiding

riskier assets to prevent further emotional pain

Answer: a) Representativeness Bias

Explanation: Representativeness Bias causes investors to see patterns in random data (e.g.,

stock price movements), leading to erroneous predictions

Answer: a) Availability Bias

Explanation: Availability Bias leads investors to overvalue assets based on easily recalled

in-formation, such as positive media coverage

Question 41

What is a heuristic in behavioral finance?

a) A complex mathematical model

b) A mental shortcut for decision-making

c) A regulatory framework

d) A financial derivative

Answer: b) A mental shortcut for decision-making

Explanation: Heuristics are simplified rules or shortcuts used to make decisions under

uncer-tainty, often leading to biases in financial contexts

Explanation: The availability heuristic causes investors to overestimate event probabilities

based on recent or memorable instances (e.g., expecting crashes after recent downturns)

Answer: a) Representativeness Heuristic

Explanation: The representativeness heuristic leads investors to judge based on similarities to

a prototype, often ignoring base rates or specifics

Answer: b) Affect Heuristic

Explanation: The affect heuristic causes decisions to be swayed by emotions (e.g., liking a

company’s brand leads to buying its stock)

An investor’s choice is influenced by how a problem is presented This is an example of:

Explanation: Framing affects decisions based on how information is presented (e.g.,

emphasiz-ing gains vs losses alters risk preferences)

Explanation: Representativeness causes investors to rely on stereotypes (e.g., assuming all

biotech stocks are risky), leading to biased judgments

Answer: a) Availability Heuristic

Explanation: The availability heuristic makes recent news more salient, skewing the investor’s

perception of the stock’s risk

d) All of the above

Answer: d) All of the above

Explanation: Heuristics like representativeness, availability, and affect simplify complex

deci-sions, but they can introduce biases

An investor feels confident in a stock because they like the company’s CEO This is:

a) Affect Heuristic

b) Representativeness

c) Availability

d) Framing

Answer: a) Affect Heuristic

Explanation: The affect heuristic drives decisions based on emotional feelings (e.g., liking the

CEO) rather than objective analysis

Explanation: The availability heuristic causes investors to overreact to news that is recent or

vivid, amplifying market movements

Explanation: Framing influences choices by presenting options in a certain light (e.g., “safe

bet” vs “risky venture”)

d) All of the above

Answer: d) All of the above

Explanation: All these heuristics can distort probability judgments by relying on simplified

mental shortcuts

Question 53

An investor buys a stock because it’s in a “hot” industry This is:

Which heuristic can cause investors to ignore statistical evidence?

a) Representativeness

b) Availability

c) Affect Heuristic

d) All of the above

Answer: d) All of the above

Explanation: These heuristics prioritize intuitive judgments over statistical data, leading to

Answer: a) Affect Heuristic

Explanation: The affect heuristic influences decisions based on emotional responses to branding

d) All of the above

Answer: d) All of the above

Explanation: Heuristics like availability (recent gains), representativeness (comparing to past

bubbles), and framing (positive media) can fuel bubbles

Answer: a) Availability Heuristic

Explanation: The availability heuristic makes negative headlines more salient, increasing