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Unit information: Behavioural Finance in 2021/22

Unit name Behavioural Finance
Unit code EFIMM0016
Credit points 15
Level of study M/7
Teaching block(s) Teaching Block 2 (weeks 13 - 24)
Unit director Dr. Sonny Biswas
Open unit status Not open
Pre-requisites

None

Co-requisites

None

School/department School of Accounting and Finance
Faculty Faculty of Social Sciences and Law

Description including Unit Aims

The purpose of the unit is to provide an understanding of psychological biases which affect financial decision-making and to consider the related empirical evidence.

The first part of the unit will provide a brief introduction to the general models in Behavioural Finance (such as Prospect Theory, Ambiguity Aversion and Herding).

The second part of the unit will focus on the implications of behavioural biases for Corporate Finance. For example, it will cover topics such as security issuance and market timing, dividend policy decisions and wealth destruction in mergers and acquisitions arising from managerial overconfidence.

Intended Learning Outcomes

By the end of the unit a student is expected to:

  1. Critically review the Efficient Markets Hypothesis and associated empirical irregularities.
  2. Describe the nature and role of investor biases in financial decision making. Apply this knowledge to personal investment decisions.
  3. Recognize that systematic biases may be exploited to make profit.
  4. Learn how to incorporate loss aversion and ambiguity aversion in a standard (rational) utility maximisation framework.
  5. Assess and judge the merits of the behavioural assumptions.

Teaching Information

Teaching will be delivered through a combination of synchronous and asynchronous sessions including lectures, tutorials, drop-in sessions, discussion boards and other online learning opportunities

Assessment Information

This unit will be assessed by 100% exam

Resources

If this unit has a Resource List, you will normally find a link to it in the Blackboard area for the unit. Sometimes there will be a separate link for each weekly topic.

If you are unable to access a list through Blackboard, you can also find it via the Resource Lists homepage. Search for the list by the unit name or code (e.g. EFIMM0016).

How much time the unit requires
Each credit equates to 10 hours of total student input. For example a 20 credit unit will take you 200 hours of study to complete. Your total learning time is made up of contact time, directed learning tasks, independent learning and assessment activity.

See the Faculty workload statement relating to this unit for more information.

Assessment
The Board of Examiners will consider all cases where students have failed or not completed the assessments required for credit. The Board considers each student's outcomes across all the units which contribute to each year's programme of study. If you have self-certificated your absence from an assessment, you will normally be required to complete it the next time it runs (this is usually in the next assessment period).
The Board of Examiners will take into account any extenuating circumstances and operates within the Regulations and Code of Practice for Taught Programmes.

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