COM 4FU3-C02 F23 Beh Fin

4FU3 (C02) - Fall 2023, page 1 of 14 degroote.mcmaster.ca Commerce 4FU3 (C02) Behavioral Finance: The Psychology of Markets Fall 2023 Finance and Business Economics DeGroote School of Business McMaster University C OURSE O BJECTIVE An introduction to the emerging field of behavioral finance. Psychology and finance are integrated in studying how investors' emotions affect stock prices and markets. While it is not surprising that financial decision-makers make mistakes, behavioral finance teaches us that many of these errors are systematic and can be explained by our psychological makeup. An understanding of these biases can improve management and investor decision-making, facilitate client relationships and lead to product design improvements. More controversially, the view that instances of investor irrationality cancel themselves out, rendering markets perfectly efficient, is being called into question. This would suggest that there may be behavioral explanations for some well-known market anomalies. This course examines these issues and will be of interest to students pursuing careers in banking, insurance, risk management, pension, portfolio management, investment and financial services industry . I NSTRUCTOR AND C ONTACT I NFORMATION Section 2: Monday 8:30 am - 11:30 am Class Location: BSB B155 Sumit Bose, MBA CFP FMA CIWM FCSI Instructor [email protected] Office: GSB 105F Office Hours: by appointment Course website: http://avenue.mcmaster.ca C OURSE E LEMENTS Credit Value: 3 Leadership: Yes IT skills: No Global view: Yes Avenue: Yes Ethics: No Numeracy: Yes Written skills: Yes Participation: Yes Innovation: Yes Group work: Yes Oral skills: Yes Evidence-based: Yes Experiential: No Final Exam: No Guest speaker(s): No

4FU3 (C02) - Fall 2023, page 2 of 14 degroote.mcmaster.ca IMPORTANT L INKS • Mosaic • Avenue to Learn • Student Accessibility Services - Accommodations • McMaster University Library C OURSE P REREQUISITES 2FA3 and 3FA3, or permission of instructor. L EARNING O UTCOMES Upon completion of this course, students should: • have a good understanding of the major concepts and issues in behavioral finance; • and be able to apply these concepts in financial decision -making. R EQUIRED C OURSE M ATERIALS AND R EADINGS 1. Avenue registration for course content, readings and case materials $0 http://avenue.mcmaster.ca O PTIONAL C OURSE M ATERIALS AND R EADINGS 1. Thinking, Fast and Slow by Daniel Kahneman (Winner of the Nobel Prize in Economics) • Publisher: Doubleday Canada • Available at the bookstore 2. Beyond Greed and Fear - Understanding Behavioral Finance and the Psychology of Investing by Hersh Shefrin; Oxford University Press 3. Nudge b y Richard Thaler (Winner of the Nobel Prize in Economics) and Cass Sunstein; Penguin Books

4FU3 (C02) - Fall 2023, page 3 of 14 degroote.mcmaster.ca C OURSE D ELIVERY AND T OOLS LEARNING ACTIVITIES DELIVERY DESCRIPTION TOOL(S) In-person Class Synch Live sessions led by your instructor In class Class Discussions Synch Participation discussions during in- person Class In Class C OURSE O VERVIEW AND A SSESSMENT A combination of lectures, discussion and problem solving. Students will be encouraged to think, analyze, evaluate, and problem-solve, not memorize. Students are expected to come to class on time and be prepared for the class, i.e., to have read the assigned reading and to have done the assigned problems. Missed tests/exams will receive a grade of zero unless the student has submitted and been approved for a Notification of Absence or MSAF. All work will be evaluated on an individual basis except in certain cases where group work is expected. In these cases, group members will share the same grade. Your final grade will be calculated as follows: Components and Weights EVALUATIONS WEIGHT DESCRIPTION Participation 10% Attendance and engagement in weekly in-class Contribution (individual) Midterm #1 25% Multiple-choice or Short Answer or Case-based Exam (Closed book) Midterm #2 35% Cumulative - Multiple-choice or Short Answer or Case-based Exam (Closed book) Assignment 30% Group Assignment - Written and Oral presentation. NOTE: The use of a McMaster standard calculator is allowed during examinations in this course. See McMaster calculator policy at the following URL: www.mcmaster.ca/policy/Students-AcademicStudies/UndergraduateExaminationsPolicy.pdf