QUESTION 3 Under the prospect theory probability weighting function " investors tend to ignore small probability events investors tend to become risk taking when facing high probability events investors overweight low probability events in their decision-making and undewveight high probability events " investors tend to choose the market portoflio over individual stocks QUESTION 4 Under prospect theory diminishing sensitivity function investors will be more sensitive when their investment changes from 500 to 600 compared to from O to 100 " investors tend to become less sensitive when facing huge losses " investors tend to hold stocks that are losing money to avoid realizing loss 7' investors seek big wins with very small probabilities