Practice Set - 2 | Practice Set | NISM Series XXI-B: Portfolio Managers Certification Examination

Question 1

Can investor overconfidence increase market trading volume excessively?

Question 2

An investor assumes a company is safer simply because its brand is familiar. This most likely reflects:

Question 3

Which behavioural concept most directly explains irrational fear during severe market declines?

Question 4

Can behavioural biases affect institutional investors as well as retail investors?

Question 5

Behavioural finance most strongly argues that market participants are:

Question 6

Can excessive optimism during bull markets distort asset valuations?

Question 7

Which behavioural bias may cause investors to overreact to dramatic but statistically rare events?

Question 8

An investor sells profitable stocks quickly but keeps losing stocks for long periods. This behavior is best explained by:

Question 9

Can framing identical investment information differently change investor behavior?

Question 10

Which behavioural bias is most likely responsible when investors assume recent market trends will continue indefinitely?

Question 11

Which behavioural bias is most likely responsible when investors believe they can consistently time market peaks and bottoms?

Question 12

An investor avoids selling a poor investment because selling would confirm a mistake. This is most closely associated with:

Question 13

A portfolio manager delays selling underperforming investments hoping they recover and avoid embarrassment. This behavior most likely combines:

Question 14

Can herding behavior contribute to speculative market bubbles?

Question 15

Can highly intelligent investors still make irrational investment decisions due to emotions?

Question 16

An investor assumes a stock is undervalued solely because its current price is lower than the purchase price. This most likely demonstrates:

Question 17

Which behavioural concept suggests investors value gains and losses differently rather than symmetrically?

Question 18

An investor focuses only on news channels supporting bullish views while ignoring negative reports. This most directly represents:

Question 19

Can behavioural biases create temporary deviations from intrinsic asset values?

Question 20

A trader believes past success occurred mainly due to personal skill while ignoring luck. This most likely reflects:

Question 21

A sudden market crash causes investors to panic sell despite unchanged long-term fundamentals. This mainly demonstrates:

Question 22

A person treats lottery winnings differently from salary income despite equal monetary value. This behavior reflects:

Question 23

An investor heavily influenced by recent market rallies may underestimate future downside risk due to:

Question 24

An investor continues purchasing a falling stock believing it must eventually recover because it was once profitable. This behavior most strongly reflects:

Question 25

Practice Set - 2