You have analyzed the financial statements and other data associated with a firm, and you have compared this firm to other firms in the same industry. Based on your analysis, you are
Convinced that this firm will increase its profits by at least 20% next year. What behavioral bias
Is this?
A)overconfidence
B)relativism
C)narcissism
D)compartmentalization

Question

Quizplus · Accepted Answer

This is an example of overconfidence bias, where the individual believes they have more accurate and confident predictions than the available data supports. This is an example of overconfidence bias, where the individual may have too much confidence in their analysis and prediction abilities, leading them to overestimate the potential for profit growth.

You Have Analyzed the Financial Statements and Other Data Associated