n NISM Certifications
XXI NISM Series XXI-A
Medium

What are the major risks associated with Overconfidence Bias?

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

Options

  1. A

    Portfolio concentration risk

  2. B

    Confusing a bull market with investment skill

  3. C

    Drifting away from the risk-return trade-off

  4. All of the above

    Correct answer

Why this is the answer

Overconfidence can lead to excessive risk-taking, concentration, and misjudging market conditions.

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