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Unit information: Behavioural Finance in 2021/22

Unit name Behavioural Finance
Unit code EFIM30062
Credit points 10
Level of study H/6
Teaching block(s) Teaching Block 1 (weeks 1 - 12)
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 objective of the unit is to provide an understanding of psychological biases which affect financial decision-making and to consider the related empirical evidence. It will introduce to students some long-standing puzzles in Finance (such as the Equity Premium Puzzle) and discuss the resolution of these puzzles using behavioural models. It will also cover topics in Corporate Finance such as consequences of over-confident corporate managers on investment and financing decisions of firms. Finally, it will provide a behavioural perspective on the Global Financial Crisis of 2007-09.

The aims of the unit are to:


1. Provide students with the tools to enable them to detect the presence of systematic biases in individual and group decision-making.
2. Enable students to critique models in Finance which assume perfect rationality.

Intended Learning Outcomes

At the end of the unit students will be expected to be able to:

  1. Critically review the Efficient markets hypothesis and associated empirical irregularities.
  2. Explain how heuristics lead to systematic biases.
  3. Apply an understanding of systematic biases to show how they can be exploited to make profits in financial markets.
  4. Evaluate the appropriateness of behavioural assumptions in different contexts.
  5. Compare and contrast the role of behavioural and rational theories to explain observed outcomes in corporate finance.
  6. Analyse, using understanding of cognitive biases, the role of behaviour in exacerbating global financial events

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. EFIM30062).

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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