This 10 credit module aims to introduce students to the most contemporary finance subject of behavioural finance. It expands the scope of financial markets and establish some controversies in relation to the understanding and interpretation of financial behaviour and market dynamics, in particular the inadequacies of the efficient markets hypothesis and the rise of behavioural finance as an alternative paradigm. 

Prerequisite Module: MA2800 Finance II: Investment Management

• Form the knowledge of concepts and fundamental principles of behavioural finance
• Explain behavioural paradox and various scenario such investment sentiment, inefficiency etc.
• Establish systematic understanding of EMH and arguments from behaviour finance perspective
• Provide efficient debate on contemporary finance issues such as crises, by utilizing behavioural finance principles

Modules will be delivered through blended learning. You will be guided through learning activities appropriate to your module, which may include:

• Weekly face to face classes (e.g. labs, lectures, exercise classes)
• Electronic resources that you work through at your own pace (e.g. videos, exercise sheets, lecture notes, e-books, quizzes)

Students are also expected to undertake self-guided study throughout the duration of the module.

Skills:

An ability to critically examine the two main principles of financial markets (efficient market or behaviour driven market); skills to apply principles to form discussions and debates on contemporary finance issues.

Transferable Skills:

Communication skills;
Analytical skills;
Skills of forming effective arguments;
Problem solving skills;
Presentation skills

Expected Utility Theory & Portfolio management in practice

The Efficient Market Hypothesis and challenges

Introduction to Behavioural Finance & Kahneman & Tversky’s Prospect theory
Psychological research and irrational choices

Limit arbitrage
Investment sentiment
Market anomalies: financial crisis and market irregularity