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Module

ACC3003 : Issues in Behavioural Finance

  • Offered for Year: 2021/22
  • Module Leader(s): Professor Darren Duxbury
  • Owning School: Newcastle University Business School
  • Teaching Location: Newcastle City Campus
Semesters
Semester 1 Credit Value: 10
Semester 2 Credit Value: 10
ECTS Credits: 10.0

Aims

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
• 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
• Dividends
• Mergers and acquisitions

Teaching Methods

Please note that module leaders are reviewing the module teaching and assessment methods for Semester 2 modules, in light of the Covid-19 restrictions. There may also be a few further changes to Semester 1 modules. Final information will be available by the end of August 2020 in for Semester 1 modules and the end of October 2020 for Semester 2 modules.

Teaching Activities
Category Activity Number Length Student Hours Comment
Guided Independent StudyAssessment preparation and completion210:0020:00Feedback via on-line MCQs and/or essay plan.
Guided Independent StudyAssessment preparation and completion187:0087:00As a specialist, research-led module, the material covered is broad and complex in nature
Structured Guided LearningLecture materials72:0014:00Pre recorded lecture materials
Scheduled Learning And Teaching ActivitiesLecture82:0016:00PIP lectures
Guided Independent StudyDirected research and reading62:0012:00Directed pre/post small grp reading. Specialist, research-led module, coverage is broad and complex.
Guided Independent StudyDirected research and reading153:0045:00Directed pre/post lecture reading. Specialist, research-led module, coverage is broad and complex.
Scheduled Learning And Teaching ActivitiesSmall group teaching61:006:00PIP seminars
Total200:00
Teaching Rationale And Relationship

A specialist, research-led module, with broad and complex academic coverage reflected in learning outcomes. Teaching and learning comprises a mixture of structured guided learning to raise awareness of key concepts and topics, which is supported via scheduled small group sessions to explore further via application/critique. Formative assessment and feedback supported via small group sessions, on-line MCQs and essay plans.

Assessment Methods

Please note that module leaders are reviewing the module teaching and assessment methods for Semester 2 modules, in light of the Covid-19 restrictions. There may also be a few further changes to Semester 1 modules. Final information will be available by the end of August 2020 in for Semester 1 modules and the end of October 2020 for Semester 2 modules.

The format of resits will be determined by the Board of Examiners

Exams
Description Length Semester When Set Percentage Comment
Written Examination1802A100N/A
Formative Assessments
Description Semester When Set Comment
Computer assessment2MOnline MCQ Test
Prob solv exercises1MParticipation in small group class provides opportunity to evaluate understanding via comparison to model answers and/or discussion
Essay2MDraft essay plan submitted for comment/feedback
Assessment Rationale And Relationship

The examination will assess the ability to explain, apply and critique concepts/models from traditional and behavioural finance and as such provides an unambiguous test of the module learning outcomes.

Formative feedback is available to students via a number of routes. The primary vehicles are i) online MCQs (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 classes.

Reading Lists

Timetable