Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
14 Cards in this Set
- Front
- Back
Behavioral finance |
Models of financial markets that emphasize potential implications of psychological factors affecting investor behavior.
|
|
Conservatism bias
|
Investors are too slow (too conservative) in updating their beliefs in response to recent evidence.
|
|
Representativeness bias
|
People are too prone to believe that a small sample is representative of a broad population and infer patterns too quickly.
|
|
Framing
|
Decisions are affected by how choices are posed, for example, as gains relative to a low baseline level or losses relative to a higher baseline.
|
|
Mental accounting
|
A specific form of framing in which people segregate certain decisions.
|
|
Regret avoidance
|
People blame themselves more for unconventional choices that turn out badly so they avoid regret by making conventional decisions.
|
|
Prospect theory
|
Behavioral theory that investor utility depends on gains or losses from starting position, rather than on their levels of wealth.
|
|
Dow theory
|
A technique that attempts to discern long- and short-term trends in stock market prices.
|
|
Breadth
|
The extent to which movements in broad market indexes are reflected widely in movements of individual stock prices.
|
|
Relative strength
|
Recent performance of a given stock or industry compared to that of a broader market index.
|
|
Trin statistic
|
The ratio of average volume in declining issues to average volume in advancing issues.
|
|
Confidence index
|
Ratio of the yield of top-rated corporate bonds to the yield on intermediate-grade bonds.
|
|
Short interest
|
The total number of shares currently sold-short in the market.
|
|
Put/call ratio
|
Ratio of put options to call options outstanding on a stock.
|