MCQs- CHAPTER 12: QUALITIES OF A GOOD RESEARCH REPORT

Herd mentality is a bias where investors follow the investment choices made by others, often due to a belief that others may have better information. This behavior can lead to bubbles and crashes in the market.

Anchoring bias is a cognitive bias where individuals rely too heavily on the first piece of information offered when making decisions. Investors may hold on to outdated information, ignoring new information that is available. This bias can impact decision-making, such as holding on to losing stocks in expectation of a price rebound based on past prices, rather than considering current information.

The time frame typically used for calculating the stock turnover ratio is one year.

Confirmation bias leads to searching, interpreting, or prioritizing information that confirms one's beliefs or hypotheses.

Stock turnover ratio is calculated using the number of shares traded divided by the number of outstanding free float shares.

Traded value turnover ratio measures the liquidity of a stock by dividing the traded value of the shares by the market capitalisation of the company.

The main measure of liquidity in the traded value turnover ratio is the traded value of the shares.

Herd Mentality bias can prevent investors from benefiting from market corrections.

Projection bias refers to projecting recent past experiences or events into the distant future, ignoring the distant past. It involves giving more weight to recent events and not considering historical patterns or trends.

Stock turnover ratio is calculated by dividing the number of shares traded during a given period by the number of outstanding free float shares.

The main objective of stock exchanges is to provide liquidity, which refers to the ease of buying and selling shares in the market.

The calling feature in bonds is most prevalent when interest rates are expected to fall.

Business risk is indeed also known as operating risk, as it is caused by factors that affect the company's operations.

Dividend is indeed a small component of the total returns from equity.