The study of the cognitive processes and biases associated with making financial and economic decisions is known as:
A)efficient thinking hypothesis.
B)financial cognition.
C)financial leverage.
D)behavioral finance.

Question

Quizplus · Accepted Answer

Behavioral finance is the study of the cognitive and behavioral factors that affect financial decision-making. This includes examining biases, heuristics, and other psychological factors that influence how individuals make economic and financial choices. The efficient thinking hypothesis (A) is not a recognized term in finance, financial cognition (B) is too broad and vague, and financial leverage (C) refers specifically to the use of debt to finance investments.

The Study of the Cognitive Processes and Biases Associated with Making