BEHAVIOURAL FINANCE

FIN5BEF

2020

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 (Pre 2022)

Credit points: 15

Subject Co-ordinator: Petko Kalev

Available to Study Abroad/Exchange Students: Yes

Subject year level: Year Level 5 - Masters

Available as Elective: No

Learning Activities: N/A

Capstone subject: No

Subject particulars

Subject rules

Prerequisites: N/A

Co-requisites: N/A

Incompatible subjects: N/A

Equivalent subjects: N/A

Quota Management Strategy: N/A

Quota-conditions or rules: N/A

Special conditions: N/A

Minimum credit point requirement: N/A

Assumed knowledge: N/A

Learning resources

The Psychology of Investing

Resource Type: Book

Resource Requirement: Prescribed

Author: Nofsinger, John R

Year: 2014

Edition/Volume: 5th edn

Publisher: Pearson Education, New Jersey

ISBN: N/A

Chapter/article title: N/A

Chapter/issue: N/A

URL: N/A

Other description: N/A

Source location: N/A

Career Ready

Career-focused: No

Work-based learning: No

Self sourced or Uni sourced: N/A

Entire subject or partial subject: N/A

Total hours/days required: N/A

Location of WBL activity (region): N/A

WBL addtional requirements: N/A

Graduate capabilities & intended learning outcomes

Graduate Capabilities

COMMUNICATION - Communicating and Influencing
DISCIPLINE KNOWLEDGE AND SKILLS
INQUIRY AND ANALYSIS - Critical Thinking and Problem Solving
INQUIRY AND ANALYSIS - Research and Evidence-Based Inquiry
PERSONAL AND PROFESSIONAL - Leadership and Teamwork

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

Melbourne (Bundoora), 2020, Semester 1, Day

Overview

Online enrolment: Yes

Maximum enrolment size: N/A

Subject Instance Co-ordinator: Petko Kalev

Class requirements

Block ModeWeek: 11 - 18
Six 6.00 hours block mode per study period on weekends during the day from week 11 to week 18 and delivered via face-to-face.
Delivered on Saturday and Sunday on the following dates: 16 & 17 March, 30 and 31 March, and 4 and 5 May.

Assessments

Assessment elementCommentsCategoryContributionHurdle%ILO*

Group Assignment and Group PresentationWritten (20%), Presentation (10%) Total equivalent to 2000 words per student

N/AN/AN/ANo30SILO1

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.

N/AN/AN/ANo20SILO2, SILO3, SILO4

3-hour final examination (equivalent to 3000 words)Comprise a mix of short-answer analytical, problem-solving and interpretative questions.

N/AN/AN/ANo50SILO3, SILO4