Investment Funds in Canada (IFIC) Final
Exam Chapter 5: Behavioral Finance and
Chap 6 Questions Fully Solved 2026.
Behavioral Finance - Answer A field of study that combines psych+econ to explain why/how
investors act. The application of psych to understand human behavior in finance/investing
Standard Finance - Answer Is characterized by how investors SHOULd behave
Behavioral Biases - Answer Systemic Errors in financial judgement of imperfections in the
perception of economic reality
1. Cognitive-subconscious mental procedures , anchoring
2. Emotional - arises spontaneously - Answer What are the 2 categories of behavioral biases
Overconfidence - Answer Overview of Behavioural Biases
1) _____ is defined as unwarranted faith in one's intuitive reasoning
Cognitive Dissonance - Answer A state of mental imbalance that occurs when contradictory
cognitions bump into one another
Availability Bias - Answer Mas nag-aadvertise ka mas magaling ka. Shark attacks are prevalent
daw??
Endowment Bias - Answer People who have this emotional bias place more value on an asset
that they hold property rights to than on an asset na hindi
Regret Aversion - Answer This bias makes people avoid making decisions because they fear
that whatever they do will be a bad decision. Investors hold on too losing stocks too long in
order to avoid admitting errors and realize losses
1. Cognitive bias
2. Emotional bias - Answer Generally, men are more susceptible to _____ and women are
more susceptible to _____
CECC-OLAC
1. overconfidence
Exam Chapter 5: Behavioral Finance and
Chap 6 Questions Fully Solved 2026.
Behavioral Finance - Answer A field of study that combines psych+econ to explain why/how
investors act. The application of psych to understand human behavior in finance/investing
Standard Finance - Answer Is characterized by how investors SHOULd behave
Behavioral Biases - Answer Systemic Errors in financial judgement of imperfections in the
perception of economic reality
1. Cognitive-subconscious mental procedures , anchoring
2. Emotional - arises spontaneously - Answer What are the 2 categories of behavioral biases
Overconfidence - Answer Overview of Behavioural Biases
1) _____ is defined as unwarranted faith in one's intuitive reasoning
Cognitive Dissonance - Answer A state of mental imbalance that occurs when contradictory
cognitions bump into one another
Availability Bias - Answer Mas nag-aadvertise ka mas magaling ka. Shark attacks are prevalent
daw??
Endowment Bias - Answer People who have this emotional bias place more value on an asset
that they hold property rights to than on an asset na hindi
Regret Aversion - Answer This bias makes people avoid making decisions because they fear
that whatever they do will be a bad decision. Investors hold on too losing stocks too long in
order to avoid admitting errors and realize losses
1. Cognitive bias
2. Emotional bias - Answer Generally, men are more susceptible to _____ and women are
more susceptible to _____
CECC-OLAC
1. overconfidence
