ICM135-Aspects of Behavioural Finance

Module Provider: ICMA Centre
Number of credits: 10 [5 ECTS credits]
Terms in which taught: Spring term module
Non-modular pre-requisites:
Modules excluded:
Module version for: 2017/8

Module Convenor: Prof Chris Brooks

Email: c.brooks@icmacentre.ac.uk

Summary module description:

This module will describe recent developments in the application of principles drawn from psychology to finance - both in terms of academic theories and practical issues. It will consider how behavioural finance can inform regulatory practice.

This module will describe recent developments in the application of principles drawn from psychology to economic and financial issues and seeks to students to think critically about the application of theories of finance to the real world context.

Assessable learning outcomes:

Additional outcomes:

Outline content:
The module begins with an exploration of the neoclassical paradigm and covers key topics such as decision-making under uncertainty, the aggregation of individual choices to market-wide outcomes, limits to arbitrage, the role of assumptions and the literature on anomalies. The psychological factors surrounding biases in judgements and decision-making and topics such as learning, information overload, the role of groups, herding and salience will also be considered. Students will then examine he essence of behavioural finance including approaches to behavioural finance, its application, lessons for stakeholders (such as investors, traders/fund managers consumers and regulators) and the limitations of behavioural finance. The module concludes with a review of the literature and practical insights from asset market bubbles and crashes and looks at the role of the regulator in prevention of or intervention to address bubbles.

Brief description of teaching and learning methods:

Contact hours:
  Autumn Spring Summer
Lectures 10
Seminars 4
Guided independent study 86
Total hours by term 100.00
Total hours for module 100.00

Summative Assessment Methods:
Method Percentage
Written assignment including essay 100

Other information on summative assessment:

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Length of examination:

Requirements for a pass:
50% weighted average mark

Reassessment arrangements:
By written assignment, as part of the overall examination arrangements for the MSc programme.

Additional Costs (specified where applicable):

Last updated: 31 March 2017

Things to do now