AEM 4230

Behavioral Finance

Course Description

Course information provided by the 2025-2026 Catalog.

The traditional framework for thinking about financial markets assumes that all market participants are fully rational. The past four decades have seen the emergence of an important new paradigm, behavioral finance, which argues that many financial phenomena are the result of less than fully rational thinking and which draws on psychology to understand the ways in which people are not fully rational. This course provides an introduction to the field. We revisit basic topics in finance from a behavioral finance perspective: topics related to markets (stock market fluctuations, popular investment strategies, bubbles); topics related to investor behavior (poor investment decisions by households); and topics related to corporate finance (security issuance, mergers and acquisitions). A running theme in the course is that knowledge of behavioral finance is essential for anyone who seeks a full understanding of modern financial markets.

Prerequisites REF-FA25/Corequisites REF-FA25 AEM 2240 or equivalent. Corequisites: None.

Enrollment Priority REF-FA25 Enrollment preference given to: Dyson students.

Last 4 terms offered (None)

Outcomes REF-FA25

• Develop effective communication skills.
• Attain analytic and functional competency in the basic business and economic skills.
• Demonstrate working knowledge of ethics and ability to apply real world settings.
• Develop skills to be critical consumers of business and economic information and research.

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