Handwritten Notes

Behavioural Finance is the study of the influence of psychology on the behaviour of the investor and practitioner investors that ultimately has a subsequent effect on the market.

It focuses on the fact that investors are not always rational, have limits to their self-control, and are influenced by their own biases. We are studying this as a subject to protect the interest of the stakeholders in the volatile market.

Topics covered in the syllabus:

  • Introduction to Behavioural Finance
  • Assumptions
  • Definition
  • Nature, scope & objectives
  • Herding of Investors
  • Relationship b/w Herding and Financial Market
  • Impact of Herding
  • Herding types
  • Reasons for Herding
  • Strategies to avoid Herding
  • Heuristics & Biases
  • Uses of Heuristics
  • Types of Heuristics
  • Determinants of Heuristics
  • How Representative Heuristics affect Investor Market
  • Strategies to Overcome Heuristic
  • Overview of Biases
  • Types of Biases
  • Reasons of Overconfidence
  • Types of Overconfidence
  • Overview of Bubble
  • Factors underlying Bubble
  • Steps that lead to the formation of Bubble
  • Causes & types of Bubble
  • Anomalies
  • Meaning, types of Anomalies
  • Human Behavioural Theories

 
 
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