n NISM Certifications
XV NISM Series XV
Medium

Some investors actively seek information that supports their pre-existing beliefs. Which behavioral bias does this illustrate?

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

Options

  1. A

    Ownership bias

  2. B

    Herd mentality

  3. Confirmation bias

    Correct answer

  4. D

    Anchoring

Why this is the answer

Confirmation bias occurs when individuals favor information that validates their existing views and ignore contradictory evidence. In investing, this can lead to biased decision-making. Ownership bias, herd mentality, and anchoring describe different behaviors.

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