Chartered Financial Analyst Level 1
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Which of the following behavioral biases is most likely associated with overconfidence in predicting companies' earnings growth rates?
A
Base-rate neglect, where the general incidence rate of a phenomenon is overlooked in favor of specific information.
B
The value anomaly, where overconfidence in predicting growth rates may lead to mispricing, particularly in growth stocks.
C
The disposition effect, which involves holding losing investments too long and selling winning investments too quickly.