Question

The most important lesson investors can learn from behavioral finance isA) to understand psychological factors influencing long-term price movement.B) to have the humility to let professionals manage their investments.C) how to avoid letting their emotions and biases affect their investment decisions.D) to have confidence in their instincts and first impressions.

Answer 1

Answer: Option A

Explanation: Behavioral finance refers to the impact of investors behavior and emotions on their decision making. It is based on the concept that investors are not rational decision makers and sometimes get biased as according to their preferences.

Thus, the investors can study this concept so they can fully understand how the psychological factors influence their decision making. This can help the investors in rational decision making for the future.

Hence from the above we can conclude that the correct option is A.