n NISM Certifications
V-A NISM Series V-A
Medium

Investors tend to extrapolate the current event into the future and expect a repeat. This is an example of ________ bias.

Practice question from NISM Series V A - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Overconfidence

  2. Recency

    Correct answer

  3. C

    Herd Mentality

  4. D

    Familiarity

Why this is the answer

Recency bias occurs when investors place too much importance on recent events and expect them to continue in the future. For example, if a market has been bullish, they may expect this trend to persist.

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