Kaplan Higher Education FPC007B Assignment 2: Quizzes on Finance

This document presents the completed BIT (Behavioral Investor Type) orientation quiz and a bias identification quiz, both crucial components of Assignment 2 for the FPC007B course at Kaplan Higher Education. The orientation quiz, adapted from Pompian (2012), explores an individual's approach to managing money, covering aspects like risk aversion, trading behavior, research habits, and reliance on advice. The bias identification quiz, also based on Pompian (2012), delves into cognitive and emotional biases that can influence investment decisions, such as loss aversion, overconfidence, and the impact of past financial experiences. The quizzes are designed to help students understand their financial personalities and identify potential biases that might affect their investment strategies. The assignment is related to behavioral finance and investor types.

Assignment 2
Appendix 1: BIT orientation quiz
Pompian, M 2012, Behavioural finance and investor types: managing behaviour to make better
investment decisions, John Wiley & Sons, Hoboken, NJ, pp. 93–94.
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BIT orientation quiz
1. My main role in managing my money is:
A To be the guardian of my wealth by not making risky investments.
B Actively trading my account to accumulate wealth.
C Doing research before investment decisions.
D Listening to others for advice on managing money.
2. When it comes to financial matters, I most agree with which statement?
A Losing money is the worst possible outcome.
B I should act quickly on opportunities to make money.
C I need to be satisfied I have taken the time to understand an investment I plan to
make, even if I miss opportunities by doing so.
D I should not be in charge of overseeing my money.
3. When deciding on an investment, I trust the advice of:
A My own self-discipline.
B My own instincts.
C My own research.
D Someone other than myself.
4. When markets are going up, I am:
A Relived.
B Excited.
C Calm and rational.
D Glad I am following someone’s advice.
5. In the financial realm, which word best describes you?
A Guardian.
B Trader.
C Researcher.
D Advice taker.
6. When it comes to following a plan to manage money, which best describes
your thinking?
A If following a plan will help safeguard my assets, I will do it.
B Following a plan is not that important.
C A plan is good, but investment decisions must include my thinking.
D I tend to follow others’ advice; so if a plan is recommended to me I will follow it or
I will just listen to others’ ideas.
7. I feel most confident about my money when:
A I can sleep at night knowing my assets are safely invested.
B I am invested in assets that have high appreciation potential.
C I make my own investment decisions or at least have input into the process.
D I am invested in things that many others are invested in.
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8. When a friend suggests a ‘sure thing’ investment idea, my response normally is:
A I typically avoid these types of ideas.
B I love things like this and I can take action right away if needed.
C I will do my own research and then decide what to do.
D I will need to consult someone else before making a decision.
9. Short-term fluctuations in my portfolio make me:
A Panic, thinking about selling.
B Sense opportunity, thinking about buying.
C Feel in control, potentially doing nothing.
D Want to call someone to see how my money is going.
10. Imagine yourself at a sporting event. Which role are you most likely to play?
A A defensive player.
B An offensive player.
C Strategist or coach.
D Fan.
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