Undergraduate Course: Behavioural Finance and Market Efficiency (ACCN10026)

Course Outline
School	Business School	College	College of Humanities and Social Science
Credit level (Normal year taken)	SCQF Level 10 (Year 3 Undergraduate)	Availability	Available to all students
SCQF Credits	20	ECTS Credits	10
Summary	This elective is designed to provide an overview of an exciting new area in finance which takes as its premise that investment decision$úmaking and investor behaviour are not necessarily driven by &«rational&ª 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&ª? How can we explain the existence of market anomalies?
Course description	Not entered

Entry Requirements (not applicable to Visiting Students)
Pre-requisites	Students MUST have passed: Principles of Finance (BUST08003)	Co-requisites
Prohibited Combinations		Other requirements	None

Information for Visiting Students
Pre-requisites	A pass in Principles of Finance (BUST08003) equivalent Visiting students should have at least 3 Business Studies courses (including at least one Finance course) at grade B or above (or be predicted to obtain this). We will only consider University/College level courses.

Course Delivery Information

Academic year 2014/15, Available to all students (SV1)		Quota: None
Course Start	Semester 1
Timetable	Timetable
Learning and Teaching activities (Further Info)	Total Hours: 200 ( Lecture Hours 20, Feedback/Feedforward Hours 2, Summative Assessment Hours 2, Revision Session Hours 2, Programme Level Learning and Teaching Hours 4, Directed Learning and Independent Learning Hours 170 )
Assessment (Further Info)	Written Exam 70 %, Coursework 30 %, Practical Exam 0 %
Additional Information (Assessment)	There will be two components of assessment, coursework (30%) and a final examination (70%). For the coursework: Each student is required to write a report of an absolute maximum length of 3000 words. There will be two sections: One section for behavioural finance topics and one section for market efficiency topics. Students will be given 2 topics in each section and they will be required to choose compulsory one topic from each section (SECTION A: Behavioural finance topics, SECTION B: Market anomalies topics) References for the above essays will be given in the course outline and on the lecture slides. Students are expected to conduct a further literature review; they will be positively assessed on the resulting original insights they bring to their essays.
Feedback	Not entered
Exam Information
Exam Diet	Paper Name		Hours & Minutes
Main Exam Diet S2 (April/May)			2:00

Academic year 2014/15, Part-year visiting students only (VV1)		Quota: None
Course Start	Semester 1
Timetable	Timetable
Learning and Teaching activities (Further Info)	Total Hours: 200 ( Lecture Hours 20, Revision Session Hours 2, Programme Level Learning and Teaching Hours 4, Directed Learning and Independent Learning Hours 174 )
Assessment (Further Info)	Written Exam 0 %, Coursework 100 %, Practical Exam 0 %
Additional Information (Assessment)	There will be two components of assessment, coursework (30%) and a final examination (70%). For the coursework: Each student is required to write a report of an absolute maximum length of 3000 words. There will be two sections: One section for behavioural finance topics and one section for market efficiency topics. Students will be given 2 topics in each section and they will be required to choose compulsory one topic from each section (SECTION A: Behavioural finance topics, SECTION B: Market anomalies topics) References for the above essays will be given in the course outline and on the lecture slides. Students are expected to conduct a further literature review; they will be positively assessed on the resulting original insights they bring to their essays.
Feedback	Not entered
No Exam Information

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.

Reading List
None

Additional Information
Graduate Attributes and Skills	Not entered
Keywords	BFME

Contacts
Course organiser	Dr Maria Michou Tel: (0131 6)50 8341 Email: Maria.Michou@ed.ac.uk	Course secretary	Ms Caroline Hall Tel: (0131 6)50 8336 Email: Caroline.Hall@ed.ac.uk