An analysis of decision making of investors and managers is classified as_________?
Correct answer: B. Behavioral finance
- A. Riskier finance
- B. Behavioral finance
- C. Premium finance
- D. Buying finance
Explanation
Behavioral finance studies how psychological factors influence the decisions of investors and managers. It helps explain decisions that may depart from purely rational financial models.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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