--%>

Investors prospects of growth

Why might investors overestimate the prospects of growth companies and underestimate value companies?

E

Expert

Verified

Historically, investors have been seen to mistakenly overestimate the prospects of growth companies and underestimate value companies because of behavioral finance syndrome. The investment does not correspond to risk but to emotion.

   Related Questions in Finance Basics

  • Q : Explain accepting or rejecting of

    For a specified IOS and MCC, how do financial managers decide which proposed capital budgeting projects to accept, and which to reject? For a specified IOS and MCC, all independent projects that plot on the IOS above the MCC are accepted. Those

  • Q : Illustrates new balance sheet Normal 0

    Normal 0 false false

  • Q : Describe advantages and the

    Describe advantages and the disadvantages of new stock issue? A new stock issue increase funds and decreases the riskiness of the firm. This also tends to send a negative signal to the market as many investors believe a company would just sell

  • Q : What is the efficiency factor Normal 0

    Normal 0 false false

  • Q : Describe the Hirfindahl-Hirschman Index

    Describe the Hirfindahl-Hirschman Index?The Hirfindahl-Hirschman Index, or HHI, is the standard measure employed by economists to evaluate market concentration. The greater the level of concentration amongst competitors, the higher the HHI. The

  • Q : Underwriting a new security issue for

    What does an investment banker do while underwriting a new security issue for any corporation? While underwriting a new security issue an investment banker purchase it and after that resells it to investors.

  • Q : What is Reverted Appropriation Reverted

    Reverted Appropriation: An appropriation which is reverted to its fund source after the date its liquidation period has terminated.

  • Q : What is Uniform Codes Manual Uniform

    Uniform Codes Manual (UCM): It is a document sustained by the Department of Finance that sets standards for codes and different other information employed in state fiscal reporting systems. Such codes recognize, for illustration, prog

  • Q : Describe Treasury bill Describe

    Describe Treasury bill? How risky is it?Treasury bills are short term debt instruments issued through the U.S. Treasury which are sold at a discount and pay face value at maturity.  They are very close to risk-free as they are backed throug

  • Q : Define the term Program Cost Accounting

    Program Cost Accounting (PCA): The level of accounting which identifies costs by activities executed in achievement of a purpose in contrast to the traditional line-item format. The aim of accounting at this level is to generate cost data adequately a