A client, Mr. Chen, invested heavily in a Canadian technology stock based on a favourable news article he read last year. Despite the stock's 30% decline since, he refuses to sell, stating it will 'surely rebound' because the initial growth prospects mentioned in the article were so strong. Which behavioural bias is Mr. Chen most likely exhibiting?

Question: A client, Mr. Chen, invested heavily in a Canadian technology stock based on a favourable news article he read last year. Despite the stock's 30% decline since, he refuses to sell, stating it will 'surely rebound' because the initial growth prospects mentioned in the article were so strong. Which behavioural bias is Mr. Chen most likely exhibiting?

Answer options: ✅ Anchoring

• Herding
• Loss Aversion
• Overconfidence

Correct answer: Anchoring

Explanation: Anchoring occurs when individuals rely too heavily on the first piece of information offered (the 'anchor') when making decisions. Mr. Chen is fixated on the initial positive news and growth prospects, influencing his current decision despite new information.