n NISM Certifications
X NISM Series X
Medium

Which bias is reflected in various market investment schemes tailored to retail investors’ life cycle needs?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Mental Accounting

    Correct answer

  2. B

    Anchoring

  3. C

    Framing

  4. D

    Fusion Investing

Why this is the answer

Mental Accounting bias involves treating different pools of money separately based on mental categories, such as retirement or education funds. This can lead investors to make suboptimal asset allocations by not considering their overall wealth holistically.

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