Why do the advocates of behavioral finance contend that the standard finance theory is incomplete?

Finance Dec 18, 2020

Expert Solution

This is because the conduct of financial specialists is not rational. The standard finance theory implies that when suggestions of a particular choice could be overall not guaranteed that financial experts will react that way. This will lead to financial institutions making better decisions in the future.

The advocate contends the theory to be incomplete the theory does not take into consideration the behavior of individual members.

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