Explain difference between biases and framing effects

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1. Describe the foreign currency and home currency approaches to capital budgeting for a foreign project. Clearly bring out the differences between the two approaches. Which is better and why? Justify your answer.

2. The textbook describes the field of Behavioral Finance as the study of “how reasoning errors influence financial decisions.” In this context, explain the difference between biases, framing effects and heuristics with examples.

Reference no: EM13984656

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