Behavioral Finance

4 units · Graduate courses (200-299)

(Formerly numbered 232F.) Lecture, three hours. Requisite: Management-Executive MBA 408 or Management-Full Time MBA 408 or Management-Fully Employed MBA 408. Introduction to and explanation of evidence of anomalous return behavior found in U.S. equities markets. Presentation of some paradigms of stock price movements that are rooted in studies from psychology and explanation of trading activity in equity risk-return paradigm. Introduction to some psychological biases that researchers suspect are inherent to investors. Employment of some results from psychology literature to explain irrationalities encountered in finance literature. Presentation of latest evidence on why individual investors trade and how individual and institutional investors form their portfolios. Letter grading.