BEHAVIOURAL FINANCE

FIN5BEF

2018

Credit points: 15

Subject outline

In this subject you will learn about the behavioural biases, heuristics and framing effects that present obstacles to maximising the value derived from financial and investment decisions. In other words, Behavioural Finance examines how individual financial decision making and behaviour affect outcomes in financial markets. This will include examination of the trading and investment behaviours of various types of investors, including individual and institutional investors, and in various market settings, with predominant focus on equity investment and trading markets.   

SchoolLa Trobe Business School

Credit points15

Subject Co-ordinatorPetko Kalev

Available to Study Abroad StudentsYes

Subject year levelYear Level 5 - Masters

Exchange StudentsYes

Subject particulars

Subject rules

PrerequisitesN/A

Co-requisitesN/A

Incompatible subjectsN/A

Equivalent subjectsN/A

Special conditionsN/A

Readings

Resource TypeTitleResource RequirementAuthor and YearPublisher
ReadingsThe Psychology of Investing, 5th ednPrescribedNofsinger, John R, 2014Pearson Education, New Jersey
ReadingsSelected published papers for the seminars (avail.through LMS)Prescribedvariousvarious

Graduate capabilities & intended learning outcomes

01. Critically identify the behavioural biases, heuristics and framing effects that present obstacles to maximising the value derived from corporate financial and investment decisions.

Activities:
Seminars will cover key concepts to be applied in the individual assignment and group presentation
Related graduate capabilities and elements:
Literacies and Communication Skills
Literacies and Communication Skills
Inquiry and Analytical Skills
Personal and Professional Skills
Discipline -Specific Knowledge and Skills

02. Critically assess and analyse how individual financial decision making and behaviour affect investment outcomes in financial markets.

Activities:
Seminars will cover key concepts to be applied in individual continuous assessment tasks and the final examination
Related graduate capabilities and elements:
Literacies and Communication Skills
Literacies and Communication Skills
Inquiry and Analytical Skills
Discipline -Specific Knowledge and Skills

03. Critically highlight the relevant issues that arise in comparisons between efficient ('economically rational') markets and less understood but more realistic behavioural ('partially rational' or 'irrational') markets.

Activities:
Seminars will cover key concepts to be applied in individual continuous assessment tasks and the final examination
Related graduate capabilities and elements:
Literacies and Communication Skills
Inquiry and Analytical Skills
Inquiry and Analytical Skills
Discipline -Specific Knowledge and Skills

04. 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.

Activities:
Seminars will cover key concepts to be applied in the final examination
Related graduate capabilities and elements:
Literacies and Communication Skills
Inquiry and Analytical Skills
Inquiry and Analytical Skills
Discipline -Specific Knowledge and Skills

Subject options

Select to view your study options…

Start date between: and    Key dates

Melbourne, 2018, Semester 2, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorPetko Kalev

Class requirements

Seminar Week: 31 - 43
One 3.0 hours seminar per week on weekdays during the day from week 31 to week 43 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
Group Assignment (20%) and Group Presentation (10%)Written (20%), Presentation (10%) Total equivalent to 2000 words per student30 01
Individual Continuous Assessment, equivalent to 1,500 words per studentThis will include various activities, including analysis of market trading activity and outcomes, reporting and interpreting empirical research results from academic papers, and critiques / reviews of academic papers.20 02, 03, 04
3-hour final examinationComprise a mix of short-answer analytical, problem-solving and interpretative questions.50 03, 04