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Options
- A
only positive
- B
only negative
-
both positive and negative
Correct answer
Why this is the answer
Recency bias refers to the tendency to give undue weight to recent events when making decisions. This bias applies to both positive and negative events. For example, after experiencing a bear market or financial crisis, investors may prefer safer assets, while after a bull market, they may invest more in risky assets, expecting the trend to continue.
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