| Unit name | Behavioural Finance |
|---|---|
| Unit code | ACFI30005 |
| Credit points | 20 |
| Level of study | H/6 |
| Teaching block(s) |
Teaching Block 1 (weeks 1 - 12) |
| Unit director | Ms. Fu |
| Open unit status | Not open |
| Units you must take before you take this one (pre-requisite units) |
None |
| Units you must take alongside this one (co-requisite units) |
None |
| Units you may not take alongside this one |
None |
| School/department | School of Accounting and Finance - Business School |
| Faculty | Faculty of Social Sciences and Law |
Why this unit is important?
Behavioural Finance combines insights from psychology with topics in finance, making it an interdisciplinary field. Taking part in this unit provides you with a new perspective to analyse real-world situations and equips you with practical skills that are applicable to careers in finance.
How does this unit fit into your programme of study?
The unit is offered as an elective to several finance-related programmes. Taking part in this unit will provide you with an important complementary perspective, looking at behavioural and psychological patterns that drive investor behaviour. The elective will deepen your understanding of these issues and of how they are related to standard finance theory.
An overview of content
The objective of the unit is to provide an understanding of psychological biases which affect financial decision-making and to consider the related empirical evidence. It will introduce to students some long-standing puzzles in Finance (such as the Equity Premium Puzzle) and discuss the resolution of these puzzles using behavioural models. It will also cover topics in Corporate Finance such as consequences of over-confident corporate managers on investment and financing decisions of firms. The behavioural explanations considered include various decision heuristics, loss aversion, and ambiguity aversion. Finally, the unit will provide a behavioural perspective on the Global Financial Crisis of 2007-09. The aims of the unit are: (i) to provide students with the tools to enable them to detect the presence of systematic biases in individual and group decision-making and (ii) to enable students to critique models in Finance which assume perfect rationality.
How will students personally be different as a result of the unit?
You will gain a fresh perspective on traditional finance topics, by adopting a behavioural approach and allowing for “irrational” investor behaviour. This will enable you to identify new types of financial issues, and it will also let you understand better how traditional finance theory works.
Learning Outcomes
Upon successful completion of the unit, students will be able to:
Weekly 2-hour lectures. In most weeks there is also a set of tutorials, in smaller groups. You are given exercises in advance, these are discussed with your peers and your tutor in class, and full solutions are published after class. You will be assigned to a group and will work within that group for your coursework project.
Your total learning time for this unit is expected to be some 200 hours. This is made up of contact time, directed learning tasks, independent learning and assessment activity.
Tasks which help you learn and prepare you for summative tasks (formative):
Tutorials will offer an opportunity to receive feedback from the tutor and from your peers.
Tasks which count towards your unit mark (summative):
80% exam, 2 hours, assessing ILO1, ILO2, ILO3.
20% CW, a group presentation, max 2000 words for the group, assessing ILO4.
When assessment does not go to plan
As this is a final year unit reassessment is not normally permitted, however, where it is permitted it will take place in the following format:
80% exam - the re-sit will take the same format as the main exam
20% CW - The resit CW essay is individual work and includes a reflective component to substitute for the group collaboration.
If this unit has a Resource List, you will normally find a link to it in the Blackboard area for the unit. Sometimes there will be a separate link for each weekly topic.
If you are unable to access a list through Blackboard, you can also find it via the Resource Lists homepage. Search for the list by the unit name or code (e.g. ACFI30005).
How much time the unit requires
Each credit equates to 10 hours of total student input. For example a 20 credit unit will take you 200 hours
of study to complete. Your total learning time is made up of contact time, directed learning tasks,
independent learning and assessment activity.
See the University Workload statement relating to this unit for more information.
Assessment
The assessment methods listed in this unit specification are designed to enable students to demonstrate the named learning outcomes (LOs). Where a disability prevents a student from undertaking a specific method of assessment, schools will make reasonable adjustments to support a student to demonstrate the LO by an alternative method or with additional resources.
The Board of Examiners will consider all cases where students have failed or not completed the assessments required for credit.
The Board considers each student's outcomes across all the units which contribute to each year's programme of study. For appropriate assessments, if you have self-certificated your absence, you will normally be required to complete it the next time it runs (for assessments at the end of TB1 and TB2 this is usually in the next re-assessment period).
The Board of Examiners will take into account any exceptional circumstances and operates
within the Regulations and Code of Practice for Taught Programmes.
