Investors underweighted systemic risk
Investors focused on the likelihood that an individual security would underperform: not at what might happen if house prices suddenly dropped ten percent, or credit markets violently contracted.
Immediately related elementsHow this works
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The Global Financial Crisis Â»The Global Financial Crisis
Long-term causes of the financial crisis? Â»Long-term causes of the financial crisis?
Human cognitive biases Â»Human cognitive biases
Investors underweighted systemic risk
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