Course overview
This course aims to provide students with insights into behavioural theories of finance, an understanding of classical versus behavioural theories of financial decision-making, and an extension of their knowledge of finance by demonstrating how “real” investors and markets do not always correspond to the “rational” agents and outcomes described under modern finance theory.
- Psychology Foundations
- Finance Basics and Behavioural Insights
- Applications and future directions
Course learning outcomes
- Identify and explain the behavioural biases, heuristics, and framing effects that present obstacles to maximising the value derived from corporate financial and investment decisions
- Assess how both individual financial decision-making and behaviour affect investment outcomes in financial markets
- Examine the relevant issues that arise in comparisons between efficient ('economically rational') markets and less understood but more realistic behavioural ('partially rational' or 'irrational') markets
- Demonstrate how educated investors and corporate decision makers can overcome these behavioural biases, heuristics, and framing effects to improve their corporate financial and investment decisions