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

Mr. Mehta is a stock market investor. The stock market crashed recently. Mr. Mehta pulls back all his investments from the stock markets because he fears that the markets will fall again. Which bias is Mr. Mehta exhibiting?

Practice question from NISM Series V A - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Recency Bias

    Correct answer

  2. B

    Overconfidence Bias

  3. C

    Confirmation Bias

  4. D

    Herd mentality

Why this is the answer

Mr. Mehta is exhibiting Recency Bias, which occurs when individuals give undue weight to recent events, allowing them to disproportionately influence decision-making. In this case, the recent market crash leads him to fear future losses, even without considering long-term potential.

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