Foundations Of Behavioral Finance
Published 9/2024
MP4 | Video: h264, 1920x1080 | Audio: AAC, 44.1 KHz
Language: English | Size: 2.26 GB | Duration: 2h 46m
This mini-course is designed to set a solid foundation for better understanding the topic of behavioral finance.
What you'll learnUnderstand the differences between classical financial theory and behavioral finance.
Learn about the various ways individuals violate rational decision-making.
Apply aspects of prospect theory to make better financial decisions.
Take notes through the provided abbreviated notes and complete exercises and quizzes to demonstrate knowledge.
RequirementsWhether you are new to finance or a financial professional looking to continue your education, this course is for you!
DescriptionIn this course, you will learn:The differences between classical financial theory and behavioral finance. We outline why behavioral finance illustrates the decisions that people actually make compared to the financial decisions that individuals "should" make (depicted by expected value and utility functions).Various ways individuals violate rational decision-making. These ways include: loss aversion, framing effects, and risk domain specificity.Understanding prospect theory and knowing how to formulate its components, including loss aversion, diminished value sensitivity, and reference point dependence.How framing and mental accounting factor into the decision-making process.Applying aspects of prospect theory to make better financial decisions. From horse betting biases to the disposition effect, we learn about how prospect theory can be applied in various domains.This course includes nearly 3 hours of lectures and included all course notes - both students notes and full instructor notes. Each of the three sections include a quiz at the end of each section for students to demonstrate their learning. Additional exercises (and solutions) are included as well.Understanding these key concepts will give students the ability to better understand themselves, but also the world around them, whether its family/friends, colleagues or clients.Whether you are new to finance or a financial professional, this course is for you!
OverviewSection 1: Foundations of Behavioral Finance: Part 1 - Expected Value to Prospect Theory
Lecture 1 Introduction to Behavioral Finance and Neoclassical Assumptions
Lecture 2 St. Petersburg Paradox and Intro to Utility Function
Lecture 3 "Deal or No Deal" - Expected Utility Function in Action
Lecture 4 Introduction to Our Risk Behaviors
Lecture 5 How Framing Affects Our Decisions
Lecture 6 Risk Domain Specificity
Lecture 7 What Causes Our (Financial) Behaviors?
Section 2: Prospect Theory, Framing and Mental Accounting
Lecture 8 Prospect Theory Basics
Lecture 9 Prospect Theory Utility Function and the Four-Fold Pattern of Risk
Lecture 10 Applying Prospect Theory to Financial Decision-Making (& Integration vs. Segrega
Lecture 11 Framing and it's Effect on Our Decisions
Lecture 12 Mental Accounting
Section 3: Applications of Learning
Lecture 13 Application of Ultimatum, Dictator, and Trust Games
Lecture 14 Homo Economicus Vs. Altruism
Lecture 15 Applications of Prospect Theory
Lecture 16 Disposition Effect
Section 4: Exercises and Solutions
Lecture 17 Part 1 Exercises and Video Solutions
Lecture 18 Part 2 Exercises and Solutions
Individual's interested in learning more about finance.,Financial professionals seeking to extend their understanding of finance.
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