This course will cover the behavioral aspects of financial decision making and personal finance planning. The students shall be introduced to the theoretical, mathematical, and empirical underpinnings of anomalies and biases that investors face in financial markets. The course also focuses the behavioral approach of investment and personal financial planning.Through this course, we do not hope to make you ‘financially literate’ or advise you what to do with your money. Instead, the course will help you explore some of the most common biases and mistakes that we, as individuals, make while dealing with money (or something of that sort). With the help of discussions on related theories, mathematical illustrations, and experimental exercises, participants should be able to become familiar with terminology, techniques and approaches used in behavioralized financial services industry. Most of techniques can also be relevant to traditional financial advisory services, the products and services in the fintech domain, and public policy.
INTENDED AUDIENCE : • BTech/BE student with a basic knowledge of Economics and Statistics • Students of MBA/MCom/MA (Eco)/BBA/BMSPREREQUISITES : NilINDUSTRY SUPPORT : Companies from BFSI (Banking, Financial services & Insurance) sector:Edelweiss Fin. Services Ltd., Barclays India, Yes Bank, CFA Institute, Capital First Ltd., Nomura, and other financial advisory firms, including investment banking companies such as JPMC, DB, etc.
Week 1 : Introduction to behavioral economics and finance: the concept of expected utility, the vonNeumann Morgenstern framework.Week 2 : Non-expected utility preferences and its applications in finance.Week 3 :Beliefs, biases and heuristics in financial markets.Week 4 :Basics of personal finance, financial planning, and budgeting.Week 5 :Investment decision making and behavioral financeWeek 6 :Investment strategies for individual investors.Week 7 : Purchasing decisions, consumer credit and related issues.Week 8 :Alternative investment and structured finance.