n NISM Certifications
X NISM Series X
Medium

Which of the following exemplifies a behavioral bias in investment decision-making?

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. A

    When an investor diversifies across multiple sectors

  2. B

    When an investor sells in panic during market shocks

  3. When an investor processes information based on past experience and preferences

    Correct answer

  4. D

    When an investor considers random wins as skillful gains

Why this is the answer

Behavioral bias occurs when investors rely on previous experiences or biases rather than current data, influencing their decision-making irrationally.

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