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Options
- A
Monetary losses hurt more than gains
- B
Choices are evaluated relative to a reference point
- C
People are risk-averse about gains but risk-seeking about losses
-
Investors always maximize their utility without biases
Correct answer
Why this is the answer
Prospect Theory incorporates that losses impact individuals more than gains, choices are made relative to a reference point, and risk behaviors differ for gains and losses; it does not assume investors are free from biases.
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