Finance And The Behavioral Prospect

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Popularity: A Bridge between Classical and Behavioral Finance

Roger G. Ibbotson,Thomas M. Idzorek,Paul D. Kaplan,James X. Xiong
Popularity A Bridge between Classical and Behavioral Finance Book PDF

Author : Roger G. Ibbotson,Thomas M. Idzorek,Paul D. Kaplan,James X. Xiong
Publisher : CFA Institute Research Foundation
Page : 128 pages
File Size : 42,5 Mb
Release : 2018
Category : Business & Economics
ISBN : 9781944960612

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Popularity: A Bridge between Classical and Behavioral Finance by Roger G. Ibbotson,Thomas M. Idzorek,Paul D. Kaplan,James X. Xiong Pdf

Classical and behavioral finance are often seen as being at odds, but the idea of “popularity” has been introduced as a way of reconciling the two approaches. Investors like or dislike various characteristics of securities for rational reasons (as in classical finance) or irrational reasons (as in behavioral finance), which makes the assets popular or unpopular. In the capital markets, popular (unpopular) securities trade at prices that are higher (lower) than they would be otherwise; hence, the shares may provide lower (higher) expected returns.This book builds on this idea and expands it in two major ways. First, it introduces a rigorous asset pricing model, the popularity asset pricing model (PAPM), which adds investor preferences for security characteristics other than the risk and expected return that are part of the capital asset pricing model. A major conclusion of the PAPM is that the expected return of any security is a linear function of not only its systematic risk (beta) but also of all security characteristics that investors care about. The other major contribution of the book is new empirical work that, while confirming the well-known premiums (such as size, value, and liquidity) in a popularity context, supports the popularity hypothesis on the basis of portfolios of stocks based on such characteristics as brand value, sustainable competitive advantage, and reputation. Popularity unifies the factors that affect price in classical finance with those that drive price in behavioral finance, thus creating a unifying theory or bridge between classical and behavioral finance.

Finance and the Behavioral Prospect

James Ming Chen
Finance and the Behavioral Prospect Book PDF

Author : James Ming Chen
Publisher : Springer
Page : 343 pages
File Size : 53,7 Mb
Release : 2016-10-01
Category : Business & Economics
ISBN : 9783319327112

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Finance and the Behavioral Prospect by James Ming Chen Pdf

This book explains how investor behavior, from mental accounting to the combustible interplay of hope and fear, affects financial economics. The transformation of portfolio theory begins with the identification of anomalies. Gaps in perception and behavioral departures from rationality spur momentum, irrational exuberance, and speculative bubbles. Behavioral accounting undermines the rational premises of mathematical finance. Assets and portfolios are imbued with “affect.” Positive and negative emotions warp investment decisions. Whether hedging against intertemporal changes in their ability to bear risk or climbing a psychological hierarchy of needs, investors arrange their portfolios and financial affairs according to emotions and perceptions. Risk aversion and life-cycle theories of consumption provide possible solutions to the equity premium puzzle, an iconic financial mystery. Prospect theory has questioned the cogency of the efficient capital markets hypothesis. Behavioral portfolio theory arises from a psychological account of security, potential, and aspiration.

Investor Behavior

H. Kent Baker,Victor Ricciardi
Investor Behavior Book PDF

Author : H. Kent Baker,Victor Ricciardi
Publisher : John Wiley & Sons
Page : 645 pages
File Size : 42,7 Mb
Release : 2014-02-10
Category : Business & Economics
ISBN : 9781118492987

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Investor Behavior by H. Kent Baker,Victor Ricciardi Pdf

WINNER, Business: Personal Finance/Investing, 2015 USA Best Book Awards FINALIST, Business: Reference, 2015 USA Best Book Awards Investor Behavior provides readers with a comprehensive understanding and the latest research in the area of behavioral finance and investor decision making. Blending contributions from noted academics and experienced practitioners, this 30-chapter book will provide investment professionals with insights on how to understand and manage client behavior; a framework for interpreting financial market activity; and an in-depth understanding of this important new field of investment research. The book should also be of interest to academics, investors, and students. The book will cover the major principles of investor psychology, including heuristics, bounded rationality, regret theory, mental accounting, framing, prospect theory, and loss aversion. Specific sections of the book will delve into the role of personality traits, financial therapy, retirement planning, financial coaching, and emotions in investment decisions. Other topics covered include risk perception and tolerance, asset allocation decisions under inertia and inattention bias; evidenced based financial planning, motivation and satisfaction, behavioral investment management, and neurofinance. Contributions will delve into the behavioral underpinnings of various trading and investment topics including trader psychology, stock momentum, earnings surprises, and anomalies. The final chapters of the book examine new research on socially responsible investing, mutual funds, and real estate investing from a behavioral perspective. Empirical evidence and current literature about each type of investment issue are featured. Cited research studies are presented in a straightforward manner focusing on the comprehension of study findings, rather than on the details of mathematical frameworks.

Behavioral Finance

H. Kent Baker,John R. Nofsinger
Behavioral Finance Book PDF

Author : H. Kent Baker,John R. Nofsinger
Publisher : John Wiley & Sons
Page : 773 pages
File Size : 47,8 Mb
Release : 2010-10-05
Category : Business & Economics
ISBN : 9780470499115

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Behavioral Finance by H. Kent Baker,John R. Nofsinger Pdf

A definitive guide to the growing field of behavioral finance This reliable resource provides a comprehensive view of behavioral finance and its psychological foundations, as well as its applications to finance. Comprising contributed chapters written by distinguished authors from some of the most influential firms and universities in the world, Behavioral Finance provides a synthesis of the most essential elements of this discipline, including psychological concepts and behavioral biases, the behavioral aspects of asset pricing, asset allocation, and market prices, as well as investor behavior, corporate managerial behavior, and social influences. Uses a structured approach to put behavioral finance in perspective Relies on recent research findings to provide guidance through the maze of theories and concepts Discusses the impact of sub-optimal financial decisions on the efficiency of capital markets, personal wealth, and the performance of corporations Behavioral finance has quickly become part of mainstream finance. If you need to gain a better understanding of this topic, look no further than this book.

The Story of Behavioral Finance

Brandon Adams,Brian Finn
The Story of Behavioral Finance Book PDF

Author : Brandon Adams,Brian Finn
Publisher : iUniverse
Page : 88 pages
File Size : 50,6 Mb
Release : 2006
Category : Business & Economics
ISBN : 9780595396900

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The Story of Behavioral Finance by Brandon Adams,Brian Finn Pdf

This book will take your understanding of finance to the next level. The Story of Behavioral Finance is about "finance in the real world"-it's finance theory with real people and real institutions. What happens when your portfolio manager sets out not to maximize your return but rather to maximize his own compensation and minimize his own career risk? Why didn't rational investors short high-flying Internet companies back in 1999? Why was it that so many of the firms that went public in 1999 and 2000 for hundreds of millions of dollars subsequently went bankrupt? These are the types of questions that will be answered in this book. The Story of Behavioral Finance will cover a lot of ground. We will cover the two main strands of behavioral finance, investor psychology and limits to arbitrage, and we'll apply these concepts to a wide array of financial market phenomena. We will explore, for example, why it is that almost no one seems to "beat the market" despite that fact that there are often easily spotted price inefficiencies.

Animal Spirits

George A. Akerlof,Robert J. Shiller
Animal Spirits Book PDF

Author : George A. Akerlof,Robert J. Shiller
Publisher : Princeton University Press
Page : 261 pages
File Size : 48,5 Mb
Release : 2010-02-01
Category : Business & Economics
ISBN : 9781400834723

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Animal Spirits by George A. Akerlof,Robert J. Shiller Pdf

From acclaimed economists George Akerlof and Robert Shiller, the case for why government is needed to restore confidence in the economy The global financial crisis has made it painfully clear that powerful psychological forces are imperiling the wealth of nations today. From blind faith in ever-rising housing prices to plummeting confidence in capital markets, "animal spirits" are driving financial events worldwide. In this book, acclaimed economists George Akerlof and Robert Shiller challenge the economic wisdom that got us into this mess, and put forward a bold new vision that will transform economics and restore prosperity. Akerlof and Shiller reassert the necessity of an active government role in economic policymaking by recovering the idea of animal spirits, a term John Maynard Keynes used to describe the gloom and despondence that led to the Great Depression and the changing psychology that accompanied recovery. Like Keynes, Akerlof and Shiller know that managing these animal spirits requires the steady hand of government—simply allowing markets to work won't do it. In rebuilding the case for a more robust, behaviorally informed Keynesianism, they detail the most pervasive effects of animal spirits in contemporary economic life—such as confidence, fear, bad faith, corruption, a concern for fairness, and the stories we tell ourselves about our economic fortunes—and show how Reaganomics, Thatcherism, and the rational expectations revolution failed to account for them. Animal Spirits offers a road map for reversing the financial misfortunes besetting us today. Read it and learn how leaders can channel animal spirits—the powerful forces of human psychology that are afoot in the world economy today. In a new preface, they describe why our economic troubles may linger for some time—unless we are prepared to take further, decisive action.

Behavioural Finance

Shuchita Singh & Shilpa Bahi
Behavioural Finance Book PDF

Author : Shuchita Singh & Shilpa Bahi
Publisher : Vikas Publishing House
Page : 128 pages
File Size : 44,6 Mb
Release : 2024-07-02
Category : Business & Economics
ISBN : 9789325984578

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Behavioural Finance by Shuchita Singh & Shilpa Bahi Pdf

The theories and concepts of behavioural finance are not widely studied. In many countries, the acceptance level of behavioural theories is quite low. However, the increasing instances of various anomalies of financial markets have forced many researchers to look closer to this modern field of finance. Behavioural Finance seeks to bring together all the concepts and theories developed by renowned international and national researchers and practitioners in financial markets. An in-depth study has been made to explain the current economic downturn and the role of behavioural finance in it. KEY FEATURES • Interviews: Latest industry views by various asset-class experts • Facts: Important factual information in boxes titled 'Do You Know?' • Abbreviations: Important and relevant abbreviated terms • Model Test Papers: For practice • Summary: Given as 'Key Learning Points' for revision

Financial Economics

Thorsten Hens,Marc Oliver Rieger
Financial Economics Book PDF

Author : Thorsten Hens,Marc Oliver Rieger
Publisher : Springer Science & Business Media
Page : 377 pages
File Size : 45,8 Mb
Release : 2010-07-01
Category : Business & Economics
ISBN : 9783540361480

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Financial Economics by Thorsten Hens,Marc Oliver Rieger Pdf

Financial economics is a fascinating topic where ideas from economics, mathematics and, most recently, psychology are combined to understand financial markets. This book gives a concise introduction into this field and includes for the first time recent results from behavioral finance that help to understand many puzzles in traditional finance. The book is tailor made for master and PhD students and includes tests and exercises that enable the students to keep track of their progress. Parts of the book can also be used on a bachelor level. Researchers will find it particularly useful as a source for recent results in behavioral finance and decision theory.

Behavioral Finance

H. Kent Baker,Greg Filbeck,John R. Nofsinger
Behavioral Finance Book PDF

Author : H. Kent Baker,Greg Filbeck,John R. Nofsinger
Publisher : Oxford University Press
Page : 256 pages
File Size : 53,8 Mb
Release : 2019-02-01
Category : Business & Economics
ISBN : 9780190868758

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Behavioral Finance by H. Kent Baker,Greg Filbeck,John R. Nofsinger Pdf

People tend to be penny wise and pound foolish and cry over spilt milk, even though we are taught to do neither. Focusing on the present at the expense of the future and basing decisions on lost value are two mistakes common to decision-making that are particularly costly in the world of finance. Behavioral Finance: What Everyone Needs to KnowR provides an overview of common shortcuts and mistakes people make in managing their finances. It covers the common cognitive biases or errors that occur when people are collecting, processing, and interpreting information. These include emotional biases and the influence of social factors, from culture to the behavior of one's peers. These effects vary during one's life, reflecting differences in due to age, experience, and gender. Among the questions to be addressed are: How did the financial crisis of 2007-2008 spur understanding human behavior? What are market anomalies and how do they relate to behavioral biases? What role does overconfidence play in financial decision- making? And how does getting older affect risk tolerance?

Behavioral Finance

Edwin T. Burton,Sunit N. Shah
Behavioral Finance Book PDF

Author : Edwin T. Burton,Sunit N. Shah
Publisher : John Wiley & Sons
Page : 261 pages
File Size : 47,6 Mb
Release : 2013-03-20
Category : Business & Economics
ISBN : 9781118331927

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Behavioral Finance by Edwin T. Burton,Sunit N. Shah Pdf

An in-depth look into the various aspects of behavioral finance Behavioral finance applies systematic analysis to ideas that have long floated around the world of trading and investing. Yet it is important to realize that we are still at a very early stage of research into this discipline and have much to learn. That is why Edwin Burton has written Behavioral Finance: Understanding the Social, Cognitive, and Economic Debates. Engaging and informative, this timely guide contains valuable insights into various issues surrounding behavioral finance. Topics addressed include noise trader theory and models, research into psychological behavior pioneered by Daniel Kahneman and Amos Tversky, and serial correlation patterns in stock price data. Along the way, Burton shares his own views on behavioral finance in order to shed some much-needed light on the subject. Discusses the Efficient Market Hypothesis (EMH) and its history, and presents the background of the emergence of behavioral finance Examines Shleifer's model of noise trading and explores other literature on the topic of noise trading Covers issues associated with anomalies and details serial correlation from the perspective of experts such as DeBondt and Thaler A companion Website contains supplementary material that allows you to learn in a hands-on fashion long after closing the book In order to achieve better investment results, we must first overcome our behavioral finance biases. This book will put you in a better position to do so.

Financial Behavior

H. Kent Baker,Greg Filbeck,Victor Ricciardi
Financial Behavior Book PDF

Author : H. Kent Baker,Greg Filbeck,Victor Ricciardi
Publisher : Oxford University Press
Page : 608 pages
File Size : 53,8 Mb
Release : 2017-05-02
Category : Business & Economics
ISBN : 9780190270018

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Financial Behavior by H. Kent Baker,Greg Filbeck,Victor Ricciardi Pdf

Financial Behavior: Players, Services, Products, and Markets provides a synthesis of the theoretical and empirical literature on the financial behavior of major stakeholders, financial services, investment products, and financial markets. The book offers a different way of looking at financial and emotional well-being and processing beliefs, emotions, and behaviors related to money. The book provides important insights about cognitive and emotional biases that influence various financial decision-makers, services, products, and markets. With diverse concepts and topics, the book brings together noted scholars and practitioners so readers can gain an in-depth understanding about this topic from experts from around the world. In today's financial setting, the discipline of behavioral finance is an ever-changing area that continues to evolve at a rapid pace. This book takes readers through the core topics and issues as well as the latest trends, cutting-edge research developments, and real-world situations. Additionally, discussion of research on various cognitive and emotional issues is covered throughout the book. Thus, this volume covers a breadth of content from theoretical to practical, while attempting to offer a useful balance of detailed and user-friendly coverage. Those interested in a broad survey will benefit as will those searching for more in-depth presentations of specific areas within this field of study. As the seventh book in the Financial Markets and Investment Series, Financial Behavior: Players, Services, Products, and Markets offers a fresh looks at the fascinating area of financial behavior.

Behavioural Finance for Private Banking

Thorsten Hens,Kremena Bachmann
Behavioural Finance for Private Banking Book PDF

Author : Thorsten Hens,Kremena Bachmann
Publisher : John Wiley & Sons
Page : 270 pages
File Size : 49,6 Mb
Release : 2011-07-05
Category : Business & Economics
ISBN : 9780470742075

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Behavioural Finance for Private Banking by Thorsten Hens,Kremena Bachmann Pdf

A complete framework for applications of behavioral finance in private banking, Behavioural Finance for Private Banking considers client needs specific to private banking like personal circumstances, objectives, and attitude to risk. This book includes the theoretical foundations of investment decision-making, an introduction to behavioral biases, an explanation of cultural differences in global business, a guide to asset allocation over the life cycle of the investment, and several case studies to illustrate how can be applied. A must-read for anyone in private banking, this book demonstrates how to satisfy client needs.

Advances in Behavioral Finance

Richard H. Thaler
Advances in Behavioral Finance Book PDF

Author : Richard H. Thaler
Publisher : Russell Sage Foundation
Page : 628 pages
File Size : 48,6 Mb
Release : 1993-08-19
Category : Business & Economics
ISBN : 0871548445

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Advances in Behavioral Finance by Richard H. Thaler Pdf

Modern financial markets offer the real world's best approximation to the idealized price auction market envisioned in economic theory. Nevertheless, as the increasingly exquisite and detailed financial data demonstrate, financial markets often fail to behave as they should if trading were truly dominated by the fully rational investors that populate financial theories. These markets anomalies have spawned a new approach to finance, one which as editor Richard Thaler puts it, "entertains the possibility that some agents in the economy behave less than fully rationally some of the time." Advances in Behavioral Finance collects together twenty-one recent articles that illustrate the power of this approach. These papers demonstrate how specific departures from fully rational decision making by individual market agents can provide explanations of otherwise puzzling market phenomena. To take several examples, Werner De Bondt and Thaler find an explanation for superior price performance of firms with poor recent earnings histories in the tendencies of investors to overreact to recent information. Richard Roll traces the negative effects of corporate takeovers on the stock prices of the acquiring firms to the overconfidence of managers, who fail to recognize the contributions of chance to their past successes. Andrei Shleifer and Robert Vishny show how the difficulty of establishing a reliable reputation for correctly assessing the value of long term capital projects can lead investment analysis, and hence corporate managers, to focus myopically on short term returns. As a testing ground for assessing the empirical accuracy of behavioral theories, the successful studies in this landmark collection reach beyond the world of finance to suggest, very powerfully, the importance of pursuing behavioral approaches to other areas of economic life. Advances in Behavioral Finance is a solid beachhead for behavioral work in the financial arena and a clear promise of wider application for behavioral economics in the future.

A Behavioral Approach to Asset Pricing

Hersh Shefrin
A Behavioral Approach to Asset Pricing Book PDF

Author : Hersh Shefrin
Publisher : Elsevier
Page : 618 pages
File Size : 46,5 Mb
Release : 2008-05-19
Category : Business & Economics
ISBN : 0080482244

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A Behavioral Approach to Asset Pricing by Hersh Shefrin Pdf

Behavioral finance is the study of how psychology affects financial decision making and financial markets. It is increasingly becoming the common way of understanding investor behavior and stock market activity. Incorporating the latest research and theory, Shefrin offers both a strong theory and efficient empirical tools that address derivatives, fixed income securities, mean-variance efficient portfolios, and the market portfolio. The book provides a series of examples to illustrate the theory. The second edition continues the tradition of the first edition by being the one and only book to focus completely on how behavioral finance principles affect asset pricing, now with its theory deepened and enriched by a plethora of research since the first edition

Advanced Introduction to Behavioral Finance

H. K. Baker,John R. Nofsinger,Victor Ricciardi
Advanced Introduction to Behavioral Finance Book PDF

Author : H. K. Baker,John R. Nofsinger,Victor Ricciardi
Publisher : Edward Elgar Publishing
Page : 176 pages
File Size : 43,8 Mb
Release : 2023-07-01
Category : Business & Economics
ISBN : 9781802206999

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Advanced Introduction to Behavioral Finance by H. K. Baker,John R. Nofsinger,Victor Ricciardi Pdf

Through detailed discussion of the central principles of behavioral finance, this enlightening Advanced Introduction provides a balanced exploration of the broad issues within the field. Chapters explain the continuous development of the discipline and provide a useful differentiation between behavioral finance and standard finance.