ConceptIntermediate
What are the three main categories of cognitive errors discussed in the chapter on behavioral finance?
The three main categories of cognitive errors discussed in the chapter on behavioral finance are biases, framing effects, and heuristics.
Key points
- Cognitive errors can lead to poor financial decisions.
- The three categories are biases, framing effects, and heuristics.
- Understanding these errors can improve decision-making in finance.
Source:Fundamentals of Corporate Finance· Behavioral Finance: Implications for Financial Management· p. 794–811
Fundamentals of Corporate Finance
ROSS
Thirteenth Edition · McGraw Hill LLC