n NISM Certifications
X NISM Series X
Medium

Behavioral finance differs from traditional finance as it considers the influence of investor psychology on market behavior and anomalies.

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Includes the impact of investor psychology

    Correct answer

  2. B

    Precludes the impact of investor psychology

  3. C

    Rejects the idea of market anomalies

  4. D

    Accepts the Efficient Markets Hypothesis

Why this is the answer

Behavioral finance studies how psychological biases and emotions affect investment decisions and market outcomes.

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