Loading...
CFA Level 3
Equity Portfolio Management

Behavioral Bias in Equity Investing

Hard Active Equity Investing Behavioral Considerations

John is a portfolio manager at a prominent asset management firm. He has been analyzing two stocks, Stock A and Stock B, which belong to the same industry. Despite Stock B demonstrating superior fundamental metrics such as higher earnings growth and better return on equity, John finds himself more inclined toward Stock A due to a prior investment experience that yielded substantial returns. This inclination seems to cloud his judgment, leading him to overlook relevant data about Stock B.

Which of the following behavioral biases is most likely affecting John's investment decision-making process regarding Stock A over Stock B?

Hint

Submitted10.6K
Correct9.0K
% Correct85%