BEHAVIORAL FINANCE

COURSE DESCRIPTION

This unit is focused on behavioral and psychological factors which influences the investment decision making of a client. This unit would further exemplify how the client behavior changes to different situations prevailing in the financial markets which would help a wealth manager in evaluating how to handle and manage the client’s responses. The unit would also include case studies covering the behavioral biases shown by the clients and how a wealth can approach and mitigate the same.


CERTIFICATION AWARDED

On successful completion of the program, you would be awarded the foundational certification in BEHAVIORAL FINANCE” by Moody’s Analytics and EduEdgePro.


COURSE COLLATERALS AND HIGHLIGHTS

  • Exhaustive reading material covering the 6 sections outlined below
  • Course delivery by domain experts
  • Case Study based pedagogy
  • Real life scenarios application
  • Understanding of several models in Behavioral Finance
 Fast Facts

 Certified by :
 Moody’s Analytics and EduEdgePro

 Broad Coverage:
  • Foundations of Behavioral Finance
  • Prospect Theory and Utility Preference Theory
  • Heuristics and its types
  • Human Biases and types
  • Economic Anomalies such as Greed and Fear, Momentum Effect
  • Market Anomalies like Day of the Week Effect, Month of the Year Effect
  • Arbitrage and its limitations
  • Herd Behavior and DotCom Herd
  • Psychographic Models

Mode of Delivery

Price

Duration
Offline Training
(Classroom)

Rs. 30,000 plus
taxes

50 Hours


E-Learning


Rs. 7,500 plus
taxes

30 Hours


Customized In-house
Group Training
Contact us


Customized



COURSE OBJECTIVES

  • Understand the Concept of Behavioral Finance
  • Describe the Hypothesis of Efficient Markets with it pros and cons
  • Describe the concepts of heuristics and biases Financial Life Cycle
  • Understand the different types of Economic and Market Anomalies
  • Describe the concept and types of Group Behavior
  • Describe the various Psychographic models


WHO SHOULD ATTEND

This course is intended for anyone who has keen interest in how our innate biases affect our financial decision-making. This course is also ideal for participants who are interested in investing in financial markets and wants to commit fewer errors and earn superior returns


DETAILED CURRICULUM

Section 1 - Introduction to behavioral finance

This section introduces the concept and importance of behavioural finance. The section also introduces efficient market hypothesis, weak form, strong form, utility preference theory, prospect theory etc.

Behavioral finance overview

  • Introduction to Behavioral Finance
  • Brief History of Rational Thought
  • Concept of Paradoxes-St. Petersburg Paradox

Market theories

  • Introduction to Efficient Market Hypothesis
  • Utility Preference Theory
  • The Prospect Theory

Section 2 - Heuristics and Biases

This section explains various types of heuristics and biases people use to make decisions. Several types of biases such as regret aversion bias, loss aversion bias, mental accounting bias etc. are explained in detail while anchoring and availability heuristics are explored in great detail.

Heuristics

  • Introduction to Heuristics
  • Anchoring and Adjustment Heuristics
  • Availability Heuristics
  • Representativeness Heuristic

Human Biases

  • Regret Aversion Bias
  • NAÏVE diversification
  • Mental Accounting Bias
  • Framing Bias
  • Loss Aversion Bias
  • Escalation of commitment
  • Disappointment Aversion Bias
  • Status Quo Bias
  • Gambler's fallacy
  • Self-Serving Bias
  • Money Illusion

Section 3 - Anomalies

Various anomalies in economic behaviour are explained in this section. A thorough overview of key concepts such as disposition effect, endowment bias, momentum effect, greed and fear etc. is provided in this section. We also understand various market related anomalies such as Day of the week effect, month of the year effect, equity premium puzzle, winner’s curse and other market anomalies.

Anomalies-Economic Behavior

  • Introduction to the Concept of Economic Anomaly
  • Disposition Effect
  • Endowment Bias
  • In Equity Reversion
  • Reciprocity
  • Inter temporal Consumption
  • Present-Biased Preferences
  • Momentum Effect
  • GREED and FEAR
  • Sunk cost Fallacy

Anomalies - Market Prices & Returns

  • Introduction to Market Anomaly
  • Equity Puzzle
  • Limits to Arbitrage
  • Dividend Puzzle
  • Calendar Anomaly
  • Fat Tails

Section 4 - Group Behavior & Investment Style and Behavioral Finance

This section explore the area of group behaviour & herd mentality and several psychographic models such as Barnewall Two way model, Bailard, Biehl and Kaiser Five way model. You will also learn about these concepts through the example of dot com bubble burst and 2008 Global crisis.

Group Behavior

  • Introduction to the Concept of Group Behavior
  • Confirmation Bias
  • Herd Behavior
  • The Dotcom Herd

Investment Style & Behavioral Finance

  • Introduction to Psychographic Model
  • Barnewall Two Way Model
  • Bailard, Biehl, and Kaiser Five-Way Model
  • Pompian Behavioral Model

DETAILED CASE STUDY AND EXCEL IMPLEMENTATION

Let us bring our classes to you! Our in-house training are ideal for groups of 10 or more people. We can provide Off-the-shelf training in the form of our classic courses, or we can provide bespoke training, tailored to your organizational goals and objectives. Please contact us for further details.