Question

One consequence of the confirmation bias is that many people believe that they could "beat the (stock) market."

True or False

Answer 1

True

reason: Confirmation bias is a kind of cognitive bias where an individual favors an information that confirms his previously held belief (or bias). This bias makes peope believe that they can beat the stock market. In the absence of the insider information, the stocks are picked randomly. But the people tend to interpret the situation from their prervious expeience. They either overlook the unfavorable data or are unaware of it. They only pick those data that favor their belief. As a result, they feel they can beat the stock market.