An equity analyst working for a growth-oriented mutual fund has a tendency to misvalue the stocks of popular companies that she has previously recommended and the fund already owns. Her behavior is most likely consistent with which of the following biases?

A. Escalation bias
B. Prospect theory
C. Confirmation bias

Correct Answer: C

Confirmation bias refers to the bias of looking for information that supports prior opinions and decisions, which leads to a tendency to misvalue the stocks of generally popular companies.