Hassan is a daily stock market investor; he buys and sells stocks in a regular base. He follows the rumors and information about the companies that he invests in their stocks and acts accordingly where he thinks that he can "win" the market despite that he is an IT specialist and have not any knowledge of stock market and has no idea how to make a technical or fundamental analysis.

Required: 

1. As per behavioral finance, what we call investors with similar characteristics like Hassan (2 marks)

2. Discuss in detail whether investors with same characteristics as Hassan can significantly impact the stock prices. (4 marks)

3. Discuss what are the actions that investors with the same characteristics of Hassan will take on the stock market during the bullish and bearish periods

Answer rating: 100% (QA)

Investors with similar characteristics to Hassan who rely on rumors information and their intuition without conducting technical or fundamental analysis are often referred to as noise traders in the c... View the full answer