easy · Certified Financial Planner General Principles
The Mendez family has been holding a losing investment for three years because they feel that selling it would 'make the loss real.'
Which type of behavioral bias are they exhibiting, and what is the standard intervention?
- A framing error that requires changing the presentation
- A cognitive error that can be corrected with a performance chart
- Anchoring bias that requires resetting the client's price expectation
- An emotional bias that may require the planner to adapt the plan
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