The Behavioral Biases of Individuals
Free CFA Level I lesson in Portfolio Management. 20 min read, ~3,013 words.
Cognitive errors come from faulty reasoning and can be moderated with education, data, and written process. Emotional biases come from feelings and usually require accommodation, not correction. Cognitive errors split into belief perseverance (conservatism, confirmation, representativeness, illusion of control, hindsight) and information processing (anchoring, mental accounting, framing, availability). Six core...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- behavioral biases of individuals
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