n NISM Certifications
XV NISM Series XV
Medium

Securities prices deviate from their fair values due to fear and greed of market participants. True or False?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. True

    Correct answer

  2. B

    False

Why this is the answer

Market psychology affects prices: fear can depress prices below intrinsic value, and greed can inflate them above it. Behavioral biases lead to short-term mispricing, though prices tend to revert to fundamentals long-term.

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