BEHAVIOURAL FINANCE
FIN5BEF
Not currently offered
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.
School: La Trobe Business School
Credit points: 15
Subject Co-ordinator: Petko Kalev
Available to Study Abroad Students: Yes
Subject year level: Year Level 5 - Masters
Exchange Students: Yes
Subject particulars
Subject rules
Prerequisites: N/A
Co-requisites: N/A
Incompatible subjects: N/A
Equivalent subjects: N/A
Special conditions: N/A
Learning resources
Readings
| Resource Type | Title | Resource Requirement | Author and Year | Publisher |
|---|---|---|---|---|
| Readings | The Psychology of Investing, 5th edn | Prescribed | Nofsinger, John R, 2014 | Pearson Education, New Jersey |
| Readings | Selected published papers for the seminars (avail.through LMS) | Prescribed | various | various |
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(Writing,Speaking)
- Literacies and Communication Skills(Writing,Speaking)
- Inquiry and Analytical Skills(Critical Thinking,Inquiry/Research)
- Personal and Professional Skills(Teamwork including leadership and working in groups)
- Discipline -Specific Knowledge and 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(Writing,Speaking)
- Literacies and Communication Skills(Writing,Speaking)
- Inquiry and Analytical Skills(Critical Thinking,Inquiry/Research)
- Discipline -Specific Knowledge and 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(Writing,Speaking)
- Inquiry and Analytical Skills(Critical Thinking,Inquiry/Research)
- Inquiry and Analytical Skills(Critical Thinking,Inquiry/Research)
- Discipline -Specific Knowledge and 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(Writing,Speaking)
- Inquiry and Analytical Skills(Critical Thinking,Inquiry/Research)
- Inquiry and Analytical Skills(Critical Thinking,Inquiry/Research)
- Discipline -Specific Knowledge and Skills(Discipline-Specific Knowledge and Skills)