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Financial experts also take psychological effects into consideration when analysing the financial markets. For example, it is a fact that investors do not like to part with securities if it means that they will suffer a loss. This causes a bias in investor behaviour and divergence from the theory that investors react rationally and are in possession of all market information at all times.

Term-Nr.: 117

German: Behavioral Finance (149)

Source: Swiss Fund Guide 2010 m. e. E., 20.04.2010

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