Which term describes decisions based on fear or hype?

• A. Saving
• B. Emotional Investing
• C. Risk-Reward Tradeoff
• D. Yield

Answer: (B)

Emotional investing describes decisions driven by fear or hype. When fear takes hold, you might panic-sell to avoid losses; when hype surrounds a hot trend, you may buy without checking whether the idea actually fits your plan or fundamentals. This behavior hinges on psychology rather than a careful, data-based analysis. Saving is simply setting money aside for future needs, not about reacting to emotions in the moment. The risk-reward tradeoff is a rational framework for evaluating potential gains against possible losses, not a behavior driven by feelings. Yield refers to the income an investment pays, not how you decide to act. So, the best fit for decisions based on fear or hype is emotional investing.