Behavioral Finance Quiz: Disposition Herding Anchoring

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What is the approximate price of the bond?

$11,200.26

What does tracking error indicate?

Standard deviation of the differential return between portfolio and benchmark

On 30th November, 2023, 'ABC Fund- Regular plan (G)' MF had assets with a market value of ₹ 6,700 cr. and liabilities of ₹ 600 cr. The total number of units outstanding on that date were 130 cr. What is the Net Asset Value?

$52.31

What is the present value annuity factor of 7 years at 4% discount rate?

<p>6.0021</p> Signup and view all the answers

What is the present value interest factor of the 7th year at 4% discount rate?

<p>0.7599</p> Signup and view all the answers

What is the interest received on the $10,000 bond?

<p>$600</p> Signup and view all the answers

What behavioral tendency is exhibited by financial analysts who publicly forecast target prices and earnings, displaying a tendency towards anchor or herd behavior?

<p>Overconfidence</p> Signup and view all the answers

In the context provided, what is the term used to characterize the behavioral inclination of Mr. Amit Patel holding investments in Ahmedabad-based companies?

<p>Home Bias</p> Signup and view all the answers

What concept is associated with the 'Sunk Cost Fallacy'?

<p>Both 'b' and 'c'</p> Signup and view all the answers

What might be a common misconception regarding a fund manager like Mr. Amit Patel's investment strategy?

<p>He avoids investing in local companies</p> Signup and view all the answers

Which term refers to the tendency of individuals to make investment decisions based on emotions or psychological biases rather than rational analysis?

<p>Disposition</p> Signup and view all the answers

What could be a potential consequence of financial analysts displaying herd behavior in issuing buy/sell recommendations?

<p>Increased market volatility</p> Signup and view all the answers

What is the correct combination of NPV of buying the car and the decision to buy or rent?

<p>Rent, NPV of buying the car is negative</p> Signup and view all the answers

What is the present value of the savings over 10 years at 6% interest?

<p>₹ 220,803</p> Signup and view all the answers

What is the Net Present Value (NPV) of buying the car?

<p>Negative</p> Signup and view all the answers

Which of the following is a one-time credit?

<p>Mortgage Loan</p> Signup and view all the answers

Which of the following is an economic factor in personal finance?

<p>Income</p> Signup and view all the answers

What is the net amount received by Jacob after the credit card company charges?

<p>₹ 84,925</p> Signup and view all the answers

What is the correct net amount received by Jacob after the commission deduction?

<p>₹80,296.25</p> Signup and view all the answers

Which of the following statements about consumer credit is correct?

<p>Shorter payment period attracts less finance charges</p> Signup and view all the answers

Which of the following statements about credit is NOT correct?

<p>Credit involves pledging current income for future consumption</p> Signup and view all the answers

What is the total commission amount received by Jacob?

<p>₹453.75</p> Signup and view all the answers

What is the laptop price after the 5% discount?

<p>₹80,750</p> Signup and view all the answers

What type of credit is an overdraft?

<p>Open-end credit</p> Signup and view all the answers

What is a realistic financial goal according to the text?

<p>Reducing spending by ₹ 1000 monthly and investing in a mutual fund</p> Signup and view all the answers

Which action will lead to a decrease in assets based on the text?

<p>Buying a house on loan</p> Signup and view all the answers

How can someone improve their financial well-being based on the text?

<p>Having a debt payment ratio above 20%</p> Signup and view all the answers

Which action will not improve an individual's financial situation?

<p>Increasing spending without a budget</p> Signup and view all the answers

In what way can reducing spending by ₹ 1000 monthly potentially benefit an individual?

<p>Increase in savings and investment</p> Signup and view all the answers

Which financial strategy aligns with a measurable goal according to the text?

<p>Setting aside ₹ 5000 monthly for retirement savings</p> Signup and view all the answers

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