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BEST PPT On Behavioural Finance
BEST PPT On Behavioural Finance
BEST PPT On Behavioural Finance
Victor Ricciardi
Assistant Professor of Financial Management
Goucher College
victor.ricciardi@goucher.edu
These 125 subject matter areas, fall into four major subcategories:
Note: This list of 125 items was developed with John Nofsinger on a previous research project.
Format of Exams: The format of the midterm and final exam is essay-
type questions.
Tools and strategies for avoiding mental mistakes and improve decision
making.
During the semester, students will have taken this online investment
risk tolerance quiz:
http://www.rcre.rutgers.edu/money/riskquiz/
We will then discuss the results of the risk tolerance quiz and how it
connects with a potential active asset allocation strategy.
Based on the inertia study by Mitchell, Mottola, Utkus and
Yamaguchi (2006) most individuals do not adjust their asset
allocation in order to stay within the proper risk tolerance category
for retirement mutual funds.
Problem: How do we overcome this inertia (inattention bias)?
Solution: Program your retirement account on “automatic
rebalance” on an annual basis. Today many retirement plans
(online accounts) allow investors to automatically re-adjust the
asset allocation on a yearly basis (e.g., on their birth date).
In other words, once a year rebalance the assets in your
retirement to equal the monthly contributions from your
paycheck for your predetermined asset allocation strategy.
Behavioral Finance Curriculum 16
Electronic copy available at: https://ssrn.com/abstract=2194579
What type of unique teaching approaches
(methodologies) can be utilized in behavioral
finance courses that are different than a
traditional (standard) finance course?
Imagine that you are advising Mr. A. Listed below are several probabilities or odds of the new company
proving financially sound. Please check the lowest probability that you could consider acceptable to
make it worthwhile for Mr. A. to take the new job.
___Mr. A. should not take the new job, no matter what.
___The chances are 9 in 10 that the company will prove to be financially sound.
___The chances are 7 in 10 that the company will prove to be financially sound.
___The chances are 5 in 10 that the company will prove to be financially sound.
___The chances are 3 in 10 that the company will prove to be financially sound.
___The chances are 1 in 10 that the company will prove to be financially sound.
Source: Wallach, M., N. Kogan, and D. Bem. (1962). Group Influence on Individual Risk Taking. Journal of Abnormal and Social Psychology,
vol. 65, no. 2, pp. 75-86.
Behavioral Finance Curriculum 18
Electronic copy available at: https://ssrn.com/abstract=2194579
What type of unique teaching approaches
(methodologies) can be utilized in behavioral
finance courses that are different than a
traditional (standard) finance course?
Description/Purpose
of the eJournal
Then students one week later, write a one and half page to
two-page essay discussion of their experience and the results of
the quizzes. Students are asked to answer two questions:
1) What is your reaction to these assessment tools?
2) Were you surprised by the results?
Students have six personality quiz write-ups assignments during
the semester. For the personality quiz write-ups, the lowest
grade is dropped, in other words, 5 of the 6 assignments count
towards the final grade.
Behavioral Finance Curriculum 35
Electronic copy available at: https://ssrn.com/abstract=2194579
A Case Study: How to develop a
course in the “Psychology of Money”
for non-business majors at the
undergraduate level?
Student Guidelines for Written Assignments and Exams:
How to answer essay questions?
1) In your approach to answering these essay questions, consider the
following sources and ideas: chapter readings, classroom handouts
and notes, internet sources, the results of your individual
psychological questionnaires, classroom discussions, videos,
academic studies, your knowledge from other classes, and your
personal observations/experiences.
How might the results of these surveys influence your financial decision
making? Please explain.
What are your “top 5” questionnaires taken this semester and why?
(Provide an actual list of 1 to 5) (Students develop two “top 5” lists one of
their favorite and the other their least favorite quizzes.)
What are other topics or issues covered during the semester you believe
influence your financial decision-making that you did not fill out a
questionnaire? Please explain. (Reflect upon the readings from book Mind
Over Money.)
Provide a conclusion.
Then the classroom exercise focuses on the results of personality tests on whether a
student is a team player, has a desire for self-employment, their degree of risk-taking
behavior, and their overall entrepreneurial traits. Other secondary issues that are
discussed are the results of quizzes “Am I Outgoing?” and “How Creative Am I?”
Ricciardi, V. (2006). A research starting point for the new scholar: A unique perspective of
behavioral finance. ICFAI Journal of Behavioral Finance, 3, 3: 6-23.
Available at SSRN: http://ssrn.com/abstract=928251
Ricciardi, V. (2004). A risk perception primer: A narrative research review of the risk perception
literature in behavioral accounting and behavioral finance. Working Paper.
Available at SSRN: http://ssrn.com/abstract=566802
Ricciardi, V. (2010). The Psychology of Risk (October 5, 2010). BEHAVIORAL FINANCE: INVESTORS,
CORPORATIONS, AND MARKETS, pp. 131-149, H. Kent Baker and John R. Nofsinger, eds., John
Wiley & Sons, 2010.
Abstract Available at SSRN: http://ssrn.com/abstract=1689554
Ricciardi, V. (2008a). The Psychology of Risk: The Behavioral Finance Perspective. HANDBOOK OF
FINANCE: VOLUME 2: INVESTMENT MANAGEMENT AND FINANCIAL MANAGEMENT, Frank J.
Fabozzi, ed., John Wiley & Sons, pp. 85-111, 2008.
Abstract Available at SSRN: http://ssrn.com/abstract=1155822
Ricciardi, V. (2008b). Risk: Traditional Finance Versus Behavioral Finance. HANDBOOK OF FINANCE:
VOLUME 3: VALUATION, FINANCIAL MODELING, AND QUANTITATIVE TOOLS, Frank J. Fabozzi, ed.,
pp. 11-38, John Wiley & Sons, 2008 .
Abstract Available at SSRN: http://ssrn.com/abstract=1155983