A18

Do you consider past performance of a share before investing in

Cumulative
Frequency Percent Valid Percent Percent
Valid a. Always 310 56.4 56.4 56.4
b. Sometimes 224 40.7 40.7 97.1
c. Never 16 2.9 2.9 100.0
Total 550 100.0 100.0

When an investor feels that he can predict the future value of a share based on its past
performance alone, he can be said to be subject to bias. Results from the contingency table showed
that 56.36% of the survey participants, when asked6 whether they believed that future value of a
stock can be predicted by analyzing past performance, opined that it is always possible and 40.73%
were of the opinion that it is possible sometimes. Results from weighted scoring showed that both
young and experienced investors were equally likely to be affected by the bias, as their mean values
were above the median reference score. Responses to the two questions were merged to fit into a
3-point Likert Scale and a conjoint analysis was performed to check if the investors were likely to
exhibit the bias. First, the weighted scoring method was employed to check if convincing results on
the bias could be obtained.
Demographic Factors Chi Square Value Significant value
Gender 0.94 0.954
Age 6.654 0.575
Education 12.996 0.043*
Profession 10.166 0.042*
Marital Status 0.420 0.811
Monthly Income 7.656 0.246
Frequency of trade 25.937 0.004*
Experience 14.662 0.066

From the results of the Chi-square analysis, it can be said that there is a statistically significant
association between the biasness of respondents with respect to Representativeness bias and their
Education, Profession and Frequency of trade. So the null hypothesis is rejected for these two
demographic factors. However a statistically significant association was not found between the
biasness of respondents and their Gender, Age, Marital Status, Monthly Income and Experience
income. So the null hypothesis is not rejected for these factors.
  Here you have to write the description according to the table- refer to Surat DA

S5

S5
Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly Disagree 17 3.1 3.1 3.1
Disagree 81 14.7 14.7 17.8
Neutral 209 38.0 38.0 55.8
Agree 178 32.4 32.4 88.2
Strongly Agree 65 11.8 11.8 100.0
Total 550 100.0 100.0

You forecast the changes in the stock prices in the future based on recent stock price.

Representativeness is judgement base on ever reliance stereostypes. The tendency of decisions of the
investors to make based on experience is known as a sterotype. Once consequence of this phenomenon
is for people to see patterns in data that is truly random .Moreover representativeness also leads people
to make forecasts that are too extreme given the predictive value of the information available. Here,
the respondents were asked if they could forecast the chenges in the stock prices in the future based on
recent stock price,44 % of them agreed, 38% remained neutral and 18% disagreed to the idea.

Demographic Profile of Respondents who are influenced by Representativeness Bias.

Demographic Factors Chi Square Value Significant value

 Gender 6.041 0.196
Age 9.674 0.883
Education 13.033 0.367
Profession 25.764 0.174
Marital Status 3.197 0.525
Monthly Income 8.591 0.743
Frequency of trade 281.131 0.000**
Experience 236.249 0.000**

From the results of the Chi-square analysis, it can be said that there is a statistically significant
association between the biasness of respondents with respect to Representativeness bias and their
marital status and age. So the null hypothesis is rejected for these two demographic factors.
However a statistically significant association was not found between the biasness of respondents
and their gender, education, occupation and annual income. So the null hypothesis is not rejected
for these factors.