GHUMATKAR ATHARVA RAJENDRA

SYBBA C
SC32

DR. AMOL MANE

FINANCIAL SERVICES
A REPORT ON BEHAVIOURAL FINANCE COURSE
Week 1 Overview:

Introduction to Behavioral Finance:

In the first week, we kicked things off by watching a quick 3-minute
video that introduced us to Behavioral Finance. After that, we spent 10
minutes reading about what to expect in the course.
Money's Importance in Classical Economics:
We then learned about money in classical economics through a short 1-
minute video and a 10-minute reading. This helped us understand how
money is seen in traditional economics and set the stage for what was
coming next.
Omission Bias:
Next up was something called "Omission Bias." We spent 2 minutes
watching a video and 10 minutes reading about how this bias can affect
our decisions, making us lean towards avoiding negative actions.
Expected Utility vs. Prospect Theory:
The week continued with a 6-minute video talking about two ways of
thinking: Expected Utility and Prospect Theory. We found out how these
ideas challenge what regular economics teaches us. Prospect Theory,
especially, showed us that our feelings and views play a big role in how
we make choices.
Week 1 Quiz:
To wrap up the week, we had a quiz with 12 questions. This made sure
we understood everything from the classical money concepts to the
different biases we explored.
What We Learned:
Week 1 gave us a good start in Behavioral Finance. We went from
learning about money in traditional economics to understanding biases
like omission bias. The quiz was like a little test to make sure we're ready
for more exciting stuff in the next weeks!
Week 2 Overview:

Correlation and Causation:

In the second week, we delved into the tricky concepts of Correlation and
Causation. Spending 10 minutes reading about the problems associated
with probability, we gained insights into how often people misunderstand
the relationship between these two.
Probability Weighting:
The week continued with a 16-minute video and 4-minute reading on
Probability Weighting. We explored how people often deviate from strict
probability rules, showing that our decision-making is not always as
rational as we might think.
The Availability Heuristic:
Next, we spent 10 minutes reading and 10 minutes watching a video on
The Availability Heuristic. This cognitive shortcut, where we rely on
readily available information, was explained, highlighting its impact on
our decision-making processes.
Representativeness:
Representativeness, discussed in a 10-minute reading, was followed by a
10-minute video on Overconfidence. We learned how our judgments can
be skewed by relying too heavily on stereotypes and assumptions.
Belief Perseverance and Confirmation Bias:
Week 2 concluded with a 9-minute video on Belief Perseverance and a 4-
minute video presenting a case study on this topic. This helped us
understand how our commitment to certain beliefs can lead to biased
decision-making.
Week 2 Quiz:
The week wrapped up with a challenging quiz comprising 14 questions,
testing our understanding of correlation, causation, heuristics, and biases.
Scoring 98.57%, we demonstrated our growing comprehension of the
intricate concepts in Behavioral Finance. Week 2 truly expanded our
understanding of the psychological factors influencing financial
decisions.
Week 3 Overview:

Benefits of Saving Early:

Week 3 kicked off with a focus on the 'Benefits of Saving Early.' We
spent 10 minutes reading about the advantages of early financial
planning, understanding the long-term impact it can have on our financial
well-being. A concise 53-second video introduced us to the basics of
financial decision-making.
Money Management:
In a 6-minute video, we explored the crucial skill of 'Money
Management.' This module aimed to provide insights into effective ways
of handling finances, emphasizing the importance of smart and strategic
financial decisions.
Market Bubbles & Crashes:
The week concluded with a comprehensive 10-minute session on 'Market
Bubbles & Crashes.' This segment likely provided a historical context,
illustrating instances of economic bubbles and crashes. Understanding
these phenomena is crucial for making informed financial decisions in the
real world.
Week 3 Quiz:
A challenging quiz awaited us at the end of the week, featuring 13
questions. Scoring an impressive 94.35%, we showcased our
understanding of topics ranging from the benefits of early saving to
market dynamics, affirming our grasp of the intricacies involved in
financial decision-making.
Week 3 not only equipped us with practical money management skills but
also broadened our awareness of the broader economic landscape,
preparing us to navigate the complexities of financial markets and make
informed decisions.
Conclusion: Behavioral Finance Insights
Week 1: Foundations
Explored money utility, biases like omission bias, and understanding
expectations of utility. The week set a strong foundation.
Week 2: Cognitive Biases
Dived into cognitive biases and heuristics, understanding correlation,
causation, the availability heuristic, and framing. A case study on belief
perseverance added practical depth.
Week 3: Financial Decision Making
Focused on practical money management, early saving benefits, and
insights into market bubbles and crashes. The concluding quiz solidified
our grasp on diverse topics.
In this concise journey, we gained profound insights into behavioral
finance principles, honing skills vital for navigating the complex realm of
financial decision-making. This course stands as a stepping stone towards
financial literacy, offering a valuable asset for making informed and
rational financial choices.