Syllabus-Behaviour Finance

Beijing Normal University Zhuhai Campus

International Finance College

Course Syllabus

Course Code: 03110180 Name of Course: Behavior Finance

Credit: 2.0 Teaching Hours: 72hours Term: Spring term 2011

Instructors: Doctor .Zheng, Yong E-mail: Yongzheng1103@yahoo.com.cn

Course Description:
The course of behavior finance use insights from psychology to understand how human behavior influences the decisions of individual and professional investors, markets, and managers. Its purpose is to present what we have learned about financial decision-making from behavioral finance research, while recognizing the challenges that remain. We will see, from this course, that behavior finance is useful in helping us understand certain puzzles at the level of the investor. And more recently, behavior finance has also made stride in providing insight into the behavior of managers.

Course Objectives:

If you finished the course you will be able to: • Understand the foundations of modern finance and its holes. • Understand the foundations of psychology. • Examine how psychology impacts financial decision-making at the level of the individual. • Examine how social forces impact the choices people make. • Describe how psychological biases have the potential to impact the behavior of managers. • Apply behavior finance theories to research retirement, pensions, education, debiasing, and client management. •

Textbook:

Financial markets and institutions, Mishkin/Eakins, Pearson Addison Wesley, 5th edition

Recommended readings:

1.《金融市场与金融机构》，（美）桑德斯，科尼特著，王中华译，人民邮电出版社

Online Resources:

1. 华尔街日报：Wall Street journal
2. 雅虎财经网：http://finance.yahoo.com
3. 东方财富网：http://www.eastmoney.com
Grading:
Presentation, in-class discussion: 60%
Final Examination: 40%

Presentation, in-class discussion (60%)

1. Each class is divided into 10 teams.
2. Each team will do a presentation which should relate to the contents in a different chapter, and organize an in-class discussion.
3. Finish in 30 minutes. Presentation in 20 minutes, discussion in 10 minutes.
4. Print and submit the presentation in PPT form on 12th Week the second-time classes.

Final Examination (40%)

The exam will last for 90 minutes, close book exam. Notes, books, calculators, electronic dictionaries, regular dictionaries are all forbidden during the exam.

Course Schedule
|WK |TOPICS |CHAPTER |
|1 |Foundations of finance I: Expected Utility Theory |1 |
|2 |Foundation of finance ⅱ:Asset pricing, market efficiency, and agency relationships. |2 |
|3 |Prospect theory, framing, and Mental Accounting |3 |
|4 |National Holiday | |
|5 |Heuristics and biases |5 |
|6 |Overconfidence |6 |
|7 |Emotional foundations |7 |
|8 |Implications of heuristics and biases for financial decision-making |8 |
|9 |Implications of overconfidence for financial decision-making |9 |
|10 |Individual investors and the force of emotion |10 |
| |Presentation 4 | |
|11 |Social forces: selfishness or altruism? |11 |
|12 |Social forces at work: the collapse of an American. |12 |
|13 |Behavior explanations for anomalies |13 |
|14 |Do behavioral factors explain stock market puzzles? |14 |
|15 |Rational managers and irrational investors |15 |
|16 |Behavioral corporate finance and managerial decision-making |16 |
|17 |Q&A | |
|18 |FINAL TERM EXAM | |