Glossary

Glossary

Term Book Chapter Definition
Confirmation Bias Behavioral Finance Chapter 2: Psychology and Finance A tendency to search for, interpret, and remember information in a way that confirms one's preexisting beliefs or hypotheses. This bias may cause investors to ignore valuable information that contradicts their beliefs about an investment.
Confirmation Bias Certified Financial Planner (CFP) Exam Chapter 8: Client Communication and Behavior A concept in behavioral finance where there is a tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses, leading to over-optimism and subsequent financial loss.
Confirmation Bias Corporate Finance Chapter 15: Behavioral Corporate Finance This is seeking information that confirms pre-existing beliefs while ignoring contradictory evidence.