MN50661: Behavioural finance
[Page last updated: 05 August 2021]
| Academic Year: | 2021/2 |
| Owning Department/School: | School of Management |
| Credits: | 3 [equivalent to 6 CATS credits] |
| Notional Study Hours: | 60 |
| Level: | Masters UG & PG (FHEQ level 7) |
| Period: |
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| Assessment Summary: | CW 100% |
| Assessment Detail: |
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| Supplementary Assessment: |
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| Requisites: | |
| Aims: | The objective of this unit is to explore, theoretically and practically, the new and emerging area of behavioural finance. Behavioural finance builds on existing finance theories and models by incorporating the effect of managerial/investor psychology and emotions. The unit will examine, in a behavioural finance framework, issues such as the effects of a) investor psychology and emotions on financial market investing and behaviour and b) managerial psychology on corporate financing decisions, such as investment appraisal, capital structure, dividends and mergers and acquisitions. In addition to background theory, the unit will make use of practical examples and case studies. It is aimed at students who want to enhance their understanding of the effects of human psychology and emotions on investor and managerial financial decision-making in a behavioural finance framework. During the course, ethical issues will be explored. |
| Learning Outcomes: | With this unit students will be able to:
* Understand the effects of managerial/investor psychology on financial market and corporate finance behaviour, particularly in comparison to the standard non-psychological finance models. * Understand how managerial/investor psychological biases affect financial decision-making. * Reflect on the challenges facing managers and investors in managing their psychological biases and emotions to enhance their financial decision-making. |
| Skills: | Intellectual skills:
* Creative thinking * Analysing and comparing various theoretical and practical financial and psychological frameworks Practical skills: * Understanding the effects of psychology and emotions on investor and manager financial behaviour * Developing strategies to overcome biased financial decision-making * Manage imperfect humans in a financial decision-making context Transferable skills: * Understanding the effects of psychology and emotions on investor and manager behaviour in a general context * Developing strategies to overcome biased decision-making in a general context * Manage imperfect humans in a general decision-making context |
| Content: | Financial market and corporate finance decision making by investors and managers. Understanding the psychological biases and emotions of managers and investors. The effect of these biases and emotions on decision-making and performance. Practical remedies and the ethical issues involved. |
| Programme availability: |
MN50661 is Optional on the following programmes:School of Management
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