Which of the following is a characteristic of 'Overconfidence' as a behavioural bias?
A. The tendency of individuals to overestimate their own knowledge, abilities or the precision of their information
B. Perfectly calibrated confidence intervals
C. The tendency to underestimate one’s own abilities
D. Only the absence of any self-assessment
Answer: Option A
Solution (By JKSSB Mock Tests)
Overconfidence manifests as excessive confidence in one’s own judgments, over-precision in probability estimates, or the better-than-average effect, and can lead to excessive trading and other suboptimal decisions.
Explanation:
Large capital inflows help finance the current account and improve the overall balance of payments. High imports, low exports and debt servicing contribute to BOP problems.
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