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FIN 3617 Behavioural Finance

FIN 3617 Behavioural Finance

Course code: 
FIN 3617
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Samuli Knüpfer
Product category: 
Bachelor
Portfolio: 
Bachelor of Finance - Programme Courses
Semester: 
2020 Spring
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

Over the past decades, the field of finance has developed a successful paradigm based on the notions that investors and managers are rational and that the market is efficient. In recent years, however, anecdotal evidence as well as theoretical and empirical research has shown this paradigm to be insufficient to describe various features of actual financial markets. In this course, we explain financial market phenomena by incorporating institutional, social, cognitive, and emotional biases to the traditional paradigm. This broader perspective is called behavioral finance.

The objective of this course is to give students an understanding of investor and managerial behavior and its impact on financial market outcomes. The participants should be able to identify most common obstacles to making rational decisions, to debias their own decisions, and to understand the risks and opportunities associated with biased decisions. The course spans all major fields of finance, including household finance, asset pricing, and corporate finance.

Learning outcomes - Knowledge

Students will acquire an understanding of the following topics:

  • How do people make investment decisions?
  • How does investor behavior affect asset prices?
  • How do firms respond to investor behavior?

 

Learning outcomes - Skills
  • Recognize behavioral biases in decision making
  • Identify implications for asset pricing
  • Understand effects on corporate behavior
General Competence
  • The student develops a behavioral framework that can be applied across a variety of financial domains.
Course content
  • Behavioral finance vs. traditional finance
  • Behavioral finance and investor behavior
  • Behavioral finance and asset pricing
  • Behavioral finance and corporate behavior
Teaching and learning activities

The course includes a combination of lectures and cases.

Specific information regarding any aspect of the course or student evaluation will be provided in class. It is the student's responsibility to obtain any information provided in class that is not included on the course homepage/itslearning or in the reading materials.

Students will be expected to actively participate in all in-class discussions (related to case studies, course concepts, applications of behavioural finance in the industry, etc.). 

Spreadsheets (Excel) are used for certain practical applications and examples. Students should be familiar with their use.

This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information below in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course start.

At re-sit all exam components must, as a main rule, be retaken during next scheduled course.

Software tools
Software defined under the section "Teaching and learning activities".
Additional information

.

Qualifications

Higher Education Entrance Qualification.

Required prerequisite knowledge

SØK 3520 Microeconomics or EXC 3520 Microeconomics and BØK 3423 Finance, or equivalent.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN36171
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
10No 1 Semester(s)Individual This component consists of a number of hand-ins that are submitted throughout the semester.
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN36171
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
20No 1 Semester(s)Group ( 1 - 4)This component consists of a number of hand-ins that are submitted throughout the semester.
Exam category:
Activity
Form of assessment:
Class participation
Exam code:
FIN36171
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
10No 1 Semester(s)Individual
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN36171
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
60Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • Interest table
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:10
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: 1 Semester(s)
Comment:This component consists of a number of hand-ins that are submitted throughout the semester.
Exam code: FIN36171
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:20
Invigilation:No
Grouping (size):Group (1-4)
Support materials:
Duration: 1 Semester(s)
Comment:This component consists of a number of hand-ins that are submitted throughout the semester.
Exam code: FIN36171
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Activity
Form of assessment:Class participation
Weight:10
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: 1 Semester(s)
Comment:
Exam code: FIN36171
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:60
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • Interest table
Duration:3 Hour(s)
Comment:
Exam code: FIN36171
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
ECTS
Total weight: 
100
Workload activityDurationType of durationComment student effort
Teaching42Hour(s)
Prepare for teaching78Hour(s)
Group work / Assignments40Hour(s)
Self study40Hour(s)Preparation for the final exam.
Expected student effort:
Workload activity:Teaching
Duration:42 Hour(s)
Comment:
Workload activity:Prepare for teaching
Duration:78 Hour(s)
Comment:
Workload activity:Group work / Assignments
Duration:40 Hour(s)
Comment:
Workload activity:Self study
Duration:40 Hour(s)
Comment:Preparation for the final exam.
Sum workload: 
200

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.