Wendy is watching CNBC during a day in which the stock market dropped, and the flashes...

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Finance

Wendy is watching CNBC during a day in which the stock marketdropped, and the flashes of red on the screen, along with the alarmbells the station keeps ringing, are driving her to near insanity.Even though her advisor reminds her that the stock market will bevolatile-this is why it earns higher returns than other assets, shecan’t seem to avoid the news. She is glued to the everominous (thisday) “doom and gloom” advice on her TV. It is causing her angst, aswell as a tendency to want to sell everything she own. 1) Whatbehavior/bias is present? 2) Why is this behavior detrimental? 3)What could have been done differently, or what could be donedifferently next time to avoid this result?

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1 Pyschological factor is present in this situation This Behaviour arise because of fear of loosing money in the stock market It is a human tendancy when the saw that the prices of the shares are falling dramitically they are nervous and sell there shares without doing any research why the markets are down 2 When the investor See Answer

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