Behavioral finance is a relatively new but quickly expanding field that seeks to provide explanations for people’s financial decisions by combining behavioral and cognitive psychological theory with conventional economics and finance. Neoclassical economists assume that; i) all individuals act rationally to maximize their utility for both monetary and non-monetary gains, and ii) markets are fully efficient and prices reflect all available, relevant information. However, in reality these assumptions often do not hold. Behavioral finance helps explain why and how markets might be inefficient, why people are imperfect processors of information and why they are often subject to biases, errors and perceptual illusions. CFA exam curriculum devotes more and more weight to behavioural finance every year. Portfolio managers, investment advisors, consultants, CFOs and individual investors must have an in-depth understanding of different behavioral biases and their impacts on financial decision making. This course aims to be a guide to understanding the fundamentals of behavioral finance and reasons and impacts of irrational investor behaviour. Throughout the course, we will cover psychological biases that effect the financial decision-making process and examine their impacts on financial markets and on people’s lives. The course will be supported by real-life case studies, analyses of investor behaviour, cases of behavioral interventions to modify investor behaviour and interviews / Q&A sessions with investment practitioners.
Behavioral Finance (FIN 806)
| Programs\Type | Required | Core Elective | Area Elective |
| Professional MBA - Non Thesis | * |
CONTENT
PROGRAMME OUTCOMES
1. Develop the ability to use critical, analytical, and reflective thinking and reasoning
2. Reflect on social and ethical responsibilities in his/her professional life.
3. Gain experience and confidence in the dissemination of project/research outputs
4. Work responsibly and creatively as an individual or as a member or leader of a team and in multidisciplinary environments.
5. Communicate effectively by oral, written, graphical and technological means and have competency in English.
6. Independently reach and acquire information, and develop appreciation of the need for continuously learning and updating.
1. Develop, interpret and use statistical analyses in decision making.
1. Identify and diagnose business problems and opportunities accurately and effectively across a wide range of business domains (accounting, financial management, operations, marketing, strategy, and organizational design), in global and local contexts.
2. Incorporate Cultural Context and Complexities in Their Managerial practice.
3. Assess the performance of an organization in a wide range of business domains, using a range of performance criteria
4. Take leadership in collaborating with others in situations characterized by differing interests, diverse perspectives and skills, in order to create working environments characterized by a sense of mission, shared values, and high levels of commitment and motivation.
5. Identify, select, and justify strategies and courses of action at the divisional, business, and corporate levels of analysis and to develop effective plans for the implementation of selected strategies across a wide range of business domains and levels.