ACC3003 : Issues in Behavioural Finance
- Offered for Year: 2018/19
- Module Leader(s): Professor Darren Duxbury
- Lecturer: Dr Yang Zhao
- Owning School: Newcastle University Business School
- Teaching Location: Newcastle City Campus
|Semester 1 Credit Value:||10|
|Semester 2 Credit Value:||10|
This module aims to provide students with an alternative view to the rational perspective of traditional finance theory. Drawing on insights from psychology the module explores the psychological biases in financial decision making, and examines the impact of these biases on investor and corporate behaviour.
Outline Of Syllabus
Foundations and review of theoretical perspectives:
• Foundations of traditional finance theory and efficient markets
• Limits to arbitrage
• Investor psychology: heuristics and biases
• Prospect theory, loss aversion and mental accounting
• Risk perception and preference
Applications (a selection of the following applications will be covered - the list is non-exhaustive and subject to change):
• Equity premium puzzle
• Excess volatility
• Over-reaction and under-reaction
• Momentum and contrarian trading strategies
• Investor overconfidence
• Disposition effect and house money effect: prior outcomes
• Investor sentiment
• Emotions in financial decisions
• Capital structure
• Mergers and acquisitions
|Scheduled Learning And Teaching Activities||Lecture||19||2:00||38:00||N/A|
|Guided Independent Study||Assessment preparation and completion||60||1:00||60:00||N/A|
|Guided Independent Study||Directed research and reading||28||3:00||84:00||Pre/post reading; direct or self-sourced.|
|Scheduled Learning And Teaching Activities||Small group teaching||8||1:00||8:00||N/A|
|Guided Independent Study||Reflective learning activity||1||10:00||10:00||Feedback via on-line MCQ.|
Teaching Rationale And Relationship
Teaching and learning comprises a mixture of lectures and classes within an interactive approach where appropriate.
• Lectures will be used to introduce and discuss major issues of interest in behavioural finance.
• Classes will be used to examine the issues introduced in the lectures in further detail, along with academic literature relating to these issues. Class work will take the form of whole group discussions, in-class debates, group presentations etc.
The format of resits will be determined by the Board of Examiners
|Computer assessment||1||M||MCQ Test|
|Computer assessment||1||A||MCQ Test|
|Computer assessment||2||A||MCQ Test|
Assessment Rationale And Relationship
The written exam will assess the ability of the students to perform at a satisfactory level in a time-constrained situation. The exam will provide a situation where the students must concentrate attention on specific questions and will provide an unambiguous test of understanding of material.
Formative feedback is available to students via a number of routes. The primary vehicles are i) a number of online MCQ tests via Blackboard (including questions drawn from a sample exam paper) and ii) the opportunity to submit for feedback extended essay plans based on questions from a sample exam paper. Students can also obtain feedback through participation in small group teaching.