Behavioural Finance ACCFIN5043
- Academic Session: 2023-24
- School: Adam Smith Business School
- Credits: 20
- Level: Level 5 (SCQF level 11)
- Typically Offered: Semester 2
- Available to Visiting Students: No
This course builds on the material covered in International Corporate Finance. In particular, the course focuses on the investment issues. Therefore a thorough understanding of concepts such as Modern Portfolio Theory, Capital Asset Pricing Model, Market Efficiency, etc. is assumed.
10 x 2 hour seminars lectures & 4 x 1 hour tutorials
■ An Individual Essay (30%) (Max word count 1,500 words)
■ A degree exam in April/May (60%)
■ An end-of-semester MCQ in-course exam (10%)
Main Assessment In: April/May
The aims of this module are:
■ to offer students a stimulating insight into the emerging field of behavioural finance and to enhance students' ability to critically interpret the behaviours associated with financial decision-making.
■ to deepen and broaden students' conceptual understanding of financial decision-making.
■ to encourage students to critically evaluate certain established financial models and understandings in light of emerging behavioural finance research and to analyse the ways in which existing models and understandings in finance might need to change to accommodate the behavioural finance research.
■ to develop students' ability to recognize the linkages between theoretical knowledge drawn from research and real practical financial decision making, and building confidence that will facilitate the putting of theoretical behavioural finance knowledge into action in financial decision-making.
Intended Learning Outcomes of Course
1. Critically assess the significance of the most commonly observed forms of decision-making bias, e.g., optimism, herding;
2. Explain and evaluate the role of heuristics, or "rules of thumb", commonly used in financial decision-making;
3. Analyse the impact of bias in simple financial decisions;
4. Analyse practical situations where financial decision-making has been influenced for better or worse in companies through bias and heuristics;
5. Critically evaluate the psychological foundations and the impact of bias and heuristics on financial decision-making;
6. Apply decision-making skills, including numerical reasoning and consideration of bias, heuristics and learning in the for example context of case-studies;
7. Work collaboratively in a group to produce a combined output, by liaising with other class members, allocating tasks and co-ordinating group meetings.
Minimum Requirement for Award of Credits
Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.