Course info

Course Outcome

1. Understand the key terms associate with behavior finance and
investment in financial markets &corporate finance.
2. Enumerate the various theories associated with behavior finance and
parameters of investing in financial market.
3. Analyze the various behavioural finance factors related to corporate
&individual investors.
4. Apply various investment strategies of effective investment in the
financial market on the basis of various theories and factors of
behavioural finance.

Syllabus Contents

Unit1
Introduction: Meaning, nature, scope and history of Behavioural Finance;
Comparison between Behavioral Finance and Standard Finance; Economics of
Decision Making, Limitation of Efficient Market Hypothesis, Behavioral
Financial Market Strategies, Behavioral Indicators,
Psychology: Social, Behavioral, Physiological, Applied, Educational, Cognitive
Psychology, Boom & Bust Cycles, Prospect Theory, Loss aversion theory,

Unit 2

Behavioral Biases theories : Heuristics, Overconfidence Bias,
Representativeness, Anchoring and Adjustment bias, cognitive dissonance bias
availability bias, self-attribution bias, illusion of control bias conservation bias,
endowment bias, optimism bias, confirmation bias, Impact of bias on investors,
External factors defining investors behavior, Fear and Greed in Financial Market,
Finance &Emotions, Investors & types, Characteristics of extremely
successful investor, Bubbles and systematic investors sentiments

Unit 3

Behavioral Corporate Finance: Introduction, Corporate decision making: Heuristic approach, prospect theory, market variables, herding effect, behavior of investor and inefficiency of market, Behavioral life cycle

Unit4
Emotions and Decision Making: Experimental measurement of risk-related Measuring Risk, Emotional mechanisms in modulating risk-taking attitude Neuro finance: Neural processes during financial decision making, Future of Neuro finance.