Postgraduate Course: Behavioural Finance and Market Anomalies (CMSE11087)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Course type | Standard |
Availability | Available to all students |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Credits | 15 |
| Home subject area | Common Courses (Management School) |
Other subject area | None |
| Course website |
None |
Taught in Gaelic? | No |
| Course description | This elective is designed to provide an overview of an exciting new area in finance which takes as its premise that investment decision¿making and investor behaviour are not necessarily driven by ¿rational¿ considerations but by aspects of personal and market psychology. Behavioural finance recognises that our abilities to make complex investment decisions are limited, and that we can improve our performance as investors and fund managers by recognising the biases and errors of judgment to which all of us are prone.
The elective discusses what we know about the psychology of financial decision-making and explores the behaviour of both individual investors and finance professionals. Are markets really ¿efficient¿? How can we explain the existence of market anomalies?
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | For Business School PG students only, or by special permission of the School. Please contact the course secretary. |
| Additional Costs | None |
Information for Visiting Students
| Pre-requisites | Business School Postgraduate Students Only |
| Displayed in Visiting Students Prospectus? | No |
Course Delivery Information
| Not being delivered |
Summary of Intended Learning Outcomes
This course is designed to introduce students to the basic principles of behavioural finance and its implications for investors in international capital markets, analysts and other market participants. On successfully completing the elective you will:
> Understand the differences between a behavioural finance perspective and a traditional finance perspective
> Be up to speed with important developments in this new area and the associated practical insights they provide
> Recognise your own decision errors and understand the reasons for these so you can avoid future decision errors
> Understand how, by appreciating the cognitive biases to which you are prone, you can become a better investor or financial manager
> Have a deeper understanding of the market efficiency debate and recent developments
> Be in a position to exploit market anomalies appropriately
> Develop the ability to appraise critically some of the less well-founded claims made by behavioural finance proponents and reconcile the teachings of behavioural finance with traditional views of market efficiency
Intellectual Skills and personal development:
Students will develop a critical understanding of the main principles of cognitive psychology as applied in behavioural finance and also how well the traditional market efficiency paradigm fit current financial markets, together with recent developments in thinking and the existence of stock market anomalies. Practical implications will be emphasised.
Subject Specific Skills:
Students will be familiarised with the latest developments and issues in behavioural finance and market efficiency, and understand their implications for securities pricing and financial analysis.
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Assessment Information
| There is one group assignment which counts for 30% of the total mark (written report) and a final two hour exam which counts for 70% of the total mark. |
Special Arrangements
| None |
Additional Information
| Academic description |
Not entered |
| Syllabus |
Not entered |
| Transferable skills |
Not entered |
| Reading list |
Not entered |
| Study Abroad |
Not entered |
| Study Pattern |
Not entered |
| Keywords | Not entered |
Contacts
| Course organiser | Dr Arman Eshraghi
Tel: (0131 6)50 4311
Email: Arman.Eshraghi@ed.ac.uk |
Course secretary | Miss Ashley Harper
Tel: (0131 6)51 5671
Email: Ashley.Harper@ed.ac.uk |
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