FIN401-Chapter 9 (exam 2)

FIN401-Chapter 9 (exam 2) - exaggerate ability to control...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 9 Chapter 9 Behavioral Finance Behavioral Finance
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Behavioral Finance Behavioral Finance The study of how psychology affects financial decisions, corporations and the financial markets
Background image of page 2
Investor Psychology Investor Psychology Some financial analysts now realize that investors can be irrational » Predictable decision errors » Decisions based on inadequate or inaccurate information Investors often make inconsistent or systematically suboptimal decisions
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Overconfidence Overconfidence Causes people to overestimate knowledge, underestimate risks,
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: exaggerate ability to control events Too much trading Take on higher risk Illusion of control Pride and Regret Pride and Regret Disposition effect Sell winners early Hold losers too long Tax consequences? Considering the Past Considering the Past House money effect Snake bite Get-evenitis Endowment effect Socialization and Mania Socialization and Mania Sharing information Herding Investment clubs Mania and bubbles...
View Full Document

Page1 / 7

FIN401-Chapter 9 (exam 2) - exaggerate ability to control...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online