Name: Delgado,Cresilda Q.

Date submitted: 12/10/2020

Time and schedule: 1:30- 3:00PM Score:

1. What do you mean by Behavioral Investor Type Framework? Explain further.

Behavioral Investor Type Framework it is about testing the personality of an investor and this is
the first in a series focusing on behavioral investor types. This series is intended to help advisors
strengthen their relationships with their clients by helping them better understanding clients'
financial personalities. It is important to know the background on how I developed behavioral
investor types. It is essential that we explore how personality tyros were developed.

2. Identify and explain the different types of Diagnostic Testing.

BIT Orientation Quiz and BIAS Identification Quiz. This different types of diagnostic testing it
should be said again that just because someone has one orientation it doesn't mean that they
won't have traits or characteristics of another orientation. It means that this is their dominant
orientation and needs to be accounted first. It is important to keep in mind that just because a
person is oriented toward or identified as one BIT versus another, it doesn't mean that they
won't have attributes of other types. For example, you might have a person that has a preserver
orientation but has independent characteristics as well.

3. Explain the general concept of the following:

a. upside/downside analysis,
b. bias analysis and
c. other biases.
The upside is that there are certain benefits that accrue to Preserver BITs. Since Preservers are
focus on preserving capital and avoiding losses, they take a somewhat conservative approach to
investing.The downside of the Preserver BIT has mainly to do with excessive focus on avoiding
losses. They are mainly emotional, which are hard to change or moderate, especially during
market upheavals. Bias analysis this preserver are dominated by emotion. Other biases, these
are the other biases that occur in preserver BIT with some regularity.

4. Explain the concept of the behavioral alpha process: a top down approach.

This method , which called behavioral alpha is a simpler and more efficient to approach to bias
identification, a top down approach make bias identification much easier. Behavioral alpha
process can maximize in a way of having realistic investment expectations, building reasonable
financial goals across realistic time horizons, establishing a personalized understanding of your
risk profile and sticking with the plan.

5. What do you think is the importance of knowing Behavioral Investor Type theory and
application? Explain base on your understanding and conceptualization about the chapter 6-8.

The importance of knowing behavioral investor type is that we can know what type of investors
are they and you should have a usable knowledge of BIT process that you can apply in practice.
To conceptualize, learning this topics we need to have a better understanding about this topic
on how important it is and we can apply it in a near future. It is also important to note that each
BIT also has positive elements that can should be leveraged to help attain financial goals. Learning
this topics we can prevent destructive behavior from limiting our ability to reach financial goals.