Explain why these biases might exist

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There is evidence that small stocks and value stocks perform better over the long term than the market averages. What are some logical reasons for this phenomenon?

There is strong evidence that many investors suffer from familiarity bias and overconfidence bias. Can you explain why these biases might exist? Can you think of a situation in which you might make these mistakes (if you hadn't learned about these biases in this module)?

Reference no: EM13273104

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