Explanation:

• Option A (Correct): Overconfidence bias leads investors to overestimate their knowledge or abilities, often resulting in poorly diversified portfolios. This lack of diversification exposes them to significant downside risk.

• Option B (Incorrect): This behavior is associated with endowment bias, where investors overvalue assets they already own due to familiarity, not overconfidence.

• Option C (Incorrect): This is a manifestation of loss-aversion bias, where investors hold onto losing investments hoping to break even, despite fundamental analysis suggesting otherwise.

Reference: Portfolio Management - Behavioral Biases in Financial Decision Making.