Behavioural Finance

Course aim

Behavioural Finance aims to: 

• introduce students to behavioural theories of finance and financial decision making.
• compare and contrast rational and behavioural theories of finance and financial decision making.
• extend students’ knowledge of finance by demonstrating how “real” investors and markets do not always correspond to the rational agents and outcomes described in standard finance courses.

Course content

Behavioural finance and the psychology of finance. Behavioural foundations: biases; heuristics; and framing effects. Biases: optimism; overconfidence; confirmation and illusion of control. Heuristics: representativeness; availability; anchoring and adjustment; and interacting phenomena. Framing effects: attitudes towards risk and loss; aversion to a sure loss; and narrow framing bias. Interaction of behavioural biases and corporate investment and other corporate finance and investment decisions; implications for market efficiency and decision making; overcoming biases in corporate finance and investment decisions. Case studies

Textbook(s)

Nofsinger, John R 2012, The Psychology of Investing, 5th edn, Pearson Education, New Jersey

Prerequisite(s)

Subject Area & Catalogue Number	Course Name
Group 1
BUSS 5233	Corporate Finance
Group 2
BUSS 5249	Managerial Finance

Corequisite(s)

Nil

Teaching method

Component	Duration
EXTERNAL, CITY WEST, DISTANCE EDUCATION
External	x 13 weeks
INTERNAL, CITY WEST (INTENSIVE)
Seminar	7 hours x 6 weeks

Note: These components may or may not be scheduled in every study period. Please refer to the timetable for further details.

Assessment

Assignment 1, Assignment 2 - Case Study, Assignment 3 - Case Study, Examination

Fees

EFTSL*: 0.125
Commonwealth Supported program (Band 3)
To determine the fee for this course as part of a Commonwealth Supported program, go to:
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Fee-paying program for domestic and international students
International students and students undertaking this course as part of a postgraduate fee paying program must refer to the relevant program home page to determine the cost for undertaking this course.

Non-award enrolment
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* Equivalent Full Time Study Load. Please note: all EFTSL values are published and calculated at ten decimal places. Values are displayed to three decimal places for ease of interpretation.