KTTS4160 Behavioral Finance (5 cr)
The lecture course gives a systematic treatment of behavioral finance starting from the arguments - limits to arbitrage and investor psychology - on which the approach is based on. Important concepts are heuristics, representativeness, overconfidence, anchoring, mental accounting, and disposition effect. The lecture course gives a thorough treatment of the key theories including the behavioral asset pricing theory by Shefrin and the prospect theory. Discussion of empirical evidence covers option markets, yield curve determination, and behavioral corporate finance in addition to the stock markets.
- understand how behavioral patterns impact asset pricing
- analyze impact of investor sentiment on market behavior
- to apply behavioral models to analyze market behavior
Lectured biannually in odd years, spring semester 4th period.
Lecture material and a textbook
- Shefrin, H. 2008. A Behavioral Approach to Asset Pricing (2nd edition); ISBN: 978-0123743565