cfa exhibit 11
Published 29 December 2012 at 468 × 299 in Behavioural Finance Textbook Describes Crashes – “As a bubble starts to unwind, there can be under-reaction when investors do not update their beliefs sufficiently, with cognitive dissonance, attempting to rationalize flawed decisions, and initially ignoring or unwilling to accept losses. In crashes, investors hold on to losers and postpone regret. This response initially causes an under-reaction to bad news, but a later capitulation and acceleration of price decline.”
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