Believers of behavioral finance principles do believe that:

A) Markets are not always efficient
B) Rational expectations reflect expected outcomes
C) Choices are always based off expected utility maximization
D) Prices reflect risk and return
E) Arbitrageurs correct mispricings in the market

Behavioral finance tries explaining how individual psychological behavior's influence their financial decisions which cause volatility in the stock market.

It points towards how psychology and human emotions and prejudices affect an investor's decisions which results into unexpected price rise and crashes in the stock market.

Behavioral finance rejects the efficient market hypothesis theory which considers markets are efficient as all the information is available, stock prices are fair reflection of that information.

Thus, Behavioral finance is an extension of behavioral economics and it's believers believe that (A) Markets are not always efficient

Believers of behavioral finance principles do believe that: A) Markets are not always efficient B) Rational expectations reflect expected outcomes C) Choices are always based off expected utility maximization D) Prices reflect risk and return E) Arbitrageurs correct mispricings in the market

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Believers of behavioral finance principles do believe that:

A) Markets are not always efficient
B) Rational expectations reflect expected outcomes
C) Choices are always based off expected utility maximization
D) Prices reflect risk and return
E) Arbitrageurs correct mispricings in the market