Lovely Professional University, Punjab

Course Code

Course Title

Course Planner

FIN614

BEHAVIOURAL FINANCE

19829::Ajay Sidana

Course Weightage

ATT: 5

Course Orientation

CA: 40

Lectures Tutorials Practicals Credits

3

ETT: 55

Exam Category: X3: Mid Term Exam: Not Applicable End Term Exam:
MCQ + Subjective
COMPETITIVE EXAMINATION(Civil Services), KNOWLEDGE ENHANCEMENT, PLACEMENT EXAMINATION

TextBooks ( T )
Sr No

Title

Author

Publisher Name

T-1

BEHAVIOURAL FINANCE

WILLIAM FORBES

WILEY

Publisher Name

Reference Books ( R )
Sr No

Title

Author

R-1

BEHAVIOURAL FINANCE

PETER DYDBAHL HEDE VENTUSPUBLISHING

Other Reading ( OR )
Sr No

Journals articles as Compulsary reading (specific articles, complete reference)

OR-1

The Implications of Behavioral Finance for the Modelling of Securities Prices, Nikos S. Thomaidis. (Available in course file) ,

OR-2

Neural Networks And Investor Sentiment Measures For Stock Market Trend Prediction, Salim Lahmiri. (Available in course file) ,

OR-3

From Efficient Market Hypothesis to Behavioural Finance: Can Behavioural Finance be the New Dominant Model for Investing?, Anastasios Konstantinidis.
(Available in course file) ,

OR-4

Testing behavioral finance models of market under and overreaction: do they really work?, Asad Kausar. (Available in course file) ,

OR-5

Overreaction behavior and Optimization techniques in Mathematical finance, Ahmet Duran. (Available in course file) ,

OR-6

A survey of behavioral finance, Nicholas Barberis. (Available in course file) ,

OR-7

Behavioural Finance and Investment Management, InvestorLit Research. (Available in course file) ,

OR-8

An empirical behavioral model of liquidity and volatility, Szabolcs Mike, J. Doyne Farmer. (Available in course file) ,

Relevant Websites ( RW )
Sr No

(Web address) (only if relevant to the course)

Salient Features

RW-1

Basic concepts and terminalogy in Behavioural Finance

www.behaviouralfinance.net

LTP week distribution: (LTP Weeks)

Weeks before MTE

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Weeks After MTE

Spill Over (Lecture)

Detailed Plan For Lectures

Week
Lecture
Number Number

Broad Topic(Sub Topic)

Week 1

Lecture 1

Introduction to Behavioral
Finance(Illustration and
structure)

T-1
R-1

RW-1

Zero Lecture and

Students will come to Discussion using
Illustration and structure know the subject
PPT
detail and academic
task assigned to them

Continuous
growth of LPU

Lecture 2

Introduction to Behavioral
Finance(Finance Theory)

T-1
R-1

OR-2

Finance Theory

Student will be able Discussion using

to Use the optimism Power point
and conformity
presentation
approaches to test
behaviour. Students
will be able to
Interpret economical
and social
phenomena

Continuous
growth of LPU

Lecture 3

Introduction to Behavioral
Finance(Rational Fools)

T-1

OR-1

Rational Fools

Student will be able

to differentiate
irrationality from
action

Lecture using
power point
presentation

Introduction to Behavioral
Finance(Rebuilding on New
Foundations)

T-1

Elements of
psychological insights

Student will be able

to differentiate
irrationality from
action

Lecture using
power point
presentation

Introduction to Behavioral
Finance(Challenging the
Classical Assumptions of
Finance)

T-1

OR-3

Assumptions, Scale and Students will learn

scope
how to test
assumptions

Case Discussion

Introduction to Behavioral
Finance(Modelling
Behavioral Aspects of
Finance)

T-1

OR-7

Representative agent
model Basic, Noise
trader model

Students will learn

how to test
assumptions with
new models

Case Analysis

Lecture 5

Financial Decision Making

(Expected Utility Rule)

T-1

Illustration of expected
utility, attitude to risk,
diversification of risk
reduction strategy

Students will capture Discussion using

impact of risk and not PPT
wealth on investment
decision making

Lecture 6

Financial Decision Making

(Expected Utility Theory)

T-1

Paradoxes and problems Students will learn to Lecture using

of expected utility
prescribe a behavior power point
theory
of an investor based presentation
on assumptions

Week 2

Lecture 4

Chapters/Sections of Other Readings,

Text/reference
Relevant Websites,
books
Audio Visual Aids,
software and Virtual
Labs

Lecture Description

Learning Outcomes Pedagogical Tool Live Examples

Demonstration/
Case Study /
Images /
animation / ppt
etc. Planned

IPL Vs Sensex

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Week 3

Lecture 7

Financial Decision Making

(Frames for Action,
Contingencies and
Outcomes)

T-1

Decision process,
Inferring big ideas, Stars
with feet of clay, More
than utility, emotional
bias

Students will be able Lecture using

to chose a particular power point
set of portfolio based presentation
on frames

Lecture 8

Learning of Behavioral
Finance(Rational Learning)

T-1

rational learning

Students will be able Case Analysis

to exploit preexisting
trends

Learning of Behavioral
Finance(Bayesian Way)

T-1

Bayes rule, elements of Student will learn the Discussion using

bayesian revision, value mathematics behind PPT
of stock
the rule

Learning of Behavioral
Finance(Over Inference and
the Law of Small Numbers)

T-1

Lecture 10 Bubbles(1929 Stock Market

Crash)

T-1
R-1

Early signs, the boom,

innovation and
speculation, investment
trusts, Final implosion

Student will be able

to apply conceptual
understandings to
crisis

Lecture using
power point
presentation

T-1

meaning and structure

of bubbles

Students will be
aware and foresee
credit crunches

Lecture using
power point
presentation

T-1

Didactic value,
Tulipmania

Student will be able

to assign value to a
particular bubble

Discussion using
PPT

T-1

LTCM, Federal reserve, Student will learn

Lecture using
market constraint
about some
power point
regulatory origins and presentation
compare it with
todays situation

Lecture 12 Bubbles(Burst of the

Bubble)

T-1

Theory behind bursting, Students will be able Lecture using

deliberation by
to foresee bursting
power point
government
and adjust their
presentation
portfolio accordingly

Lecture 13 Noise Traders(Meaning and

Structure)

T-1

L13 L 14: meaning and Students will be able Discussion using

structure of noise traders to notice activities of PPT
noise traders in price
fluctuations

Lecture 9

Week 4

Bubbles(Meaning and
structure)
Lecture 11 Bubbles(Value of Bubbles)

Bubbles(Regulatory origins)

Week 5

OR-5

over interference, basics Enable Student when Lecture and

of law of small numbers to not to react to fund discussion
quality
2008 Financial
Crash

2014 Election,
Modi Wave Vs
market surging

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Week 5

Week 6

Lecture 14 Noise Traders(Meaning and

Structure)

T-1

Lecture 15 Noise Traders(Emotional

Investors)

T-1

Lecture 16 Overconfidence and

Optimism(Meaning and
Structure)

T-1

Meaning, structure, the

model, price setting,
Condition for
overconfident pricing

Student will be able

to frame
overconfidence as a
problem

Lecture using
power point
presentation

T-1

Optimism in corporate Students will apply

finance, facing failure, this knowledge to
who dares loses, Hubris their portfolio
theory

Lecture using
power point
presentation

Lecture 17 Over reactions and/or Under

reactions(Meaning and
structure)

T-1

Meaning and structure

of over reaction and
under reaction

Student will be able Case Discussion

to frame overreaction
as a problem

Over reactions and/or Under

reactions(DHS Model)

T-1

DHS Model

Student will be able Case Discussion

to frame overreaction
as a problem

Lecture 18 Over reactions and/or Under

reactions(Significance of
Non-events or Noise for
security pricing)

T-1

Significance of Nonevents or Noise for

security pricing

Student will be able Case Discussion

to frame overreaction
as a problem

Lecture 19 Momentum(Meaning and

Structure)

T-1

Meaning and structure

of momentum

Students will
Lecture using
incorporate the affect power point
of momentum in their presentation
decision making

Lecture 20 Momentum(Drivers of the

stock-market momentum)

T-1

L20 L21 Drivers of

stock -market
momentum

L20 Students will

Discussion using
incorporate the affect examples
of momentum in their
decision making.
L 21 Students will be
able to analysis the
evidence of PEAD

Lecture 21 Momentum(Drivers of the

stock-market momentum)

T-1

L20 L21 Drivers of

stock -market
momentum

L20 Students will

Discussion using
incorporate the affect examples
of momentum in their
decision making.
L 21 Students will be
able to analysis the
evidence of PEAD

Overconfidence and
Optimism(Investors attitude
towards trading)

Week 7

L13 L 14: meaning and Students will be able Discussion using

structure of noise traders to notice activities of PPT
noise traders in price
fluctuations
Feeling the risk,
Heuristic affect, panic
and feedback,
Diminishing roar

Students will be able Discussion using

to notice activities of PPT
noise traders in price
fluctuations

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Week 8

Lecture 22 Momentum(Causes of
PEAD)

T-1

OR-4

L22 L23: causes of

PEAD

L22 L23 Students

will incorporate the
affect of momentum
in their decision
making

Discussion using
PPT and example

Lecture 23 Momentum(Causes of
PEAD)

T-1

OR-4

L22 L23: causes of

PEAD

L22 L23 Students

will incorporate the
affect of momentum
in their decision
making

Discussion using
PPT and example

SPILL OVER
Week 8

Lecture 24

Spill Over

MID-TERM
Week 9

Lecture 25 Herding(Meaning and

Structure)

T-1

RW-1

meaning and structure of Students will

Lecture using
herding
understand meaning power point
and its structure,and presentation
conformity as a force
for social good and
evil

Herding(FSS Model)

T-1

RW-1

FSS model

Herding(Conformity as a
force for social good and
evil)

T-1

RW-1

Conformity as a force
Students will
Lecture using
for social good and evil understand meaning power point
and its structure,and presentation
conformity as a force
for social good and
evil

Lecture 26 Insider Trading(Meaning

and Structure)

T-1

OR-7

Meaning of structure of Students will come to Lecture using

Insider Trading
know the conceptual power point
knowledge and its
presentation
impact on common
man

Insider Trading(Pros and

Cons for Insider Trading)

T-1

OR-7

Pros and Cons for

Insider Trading

Students will come to Lecture using

know the conceptual power point
knowledge and its
presentation
impact on common
man

Insider Trading(Stock
options)

T-1

OR-7

Stock options

Students will come to Discussion by

know the conceptual using PPTs
knowledge and its
impact on common
man

Students will
Lecture using
understand meaning power point
and its structure,and presentation
conformity as a force
for social good and
evil

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Week 9

Lecture 26 Insider Trading

(Consequences of Insider
trading for outsiders)

T-1

OR-7

Consequences of Insider Students will come to Discussion by

trading for outsiders
know the conceptual using PPTs
knowledge and its
impact on common
man

Lecture 27 Behavioral Finance in

Corporates(Incorporation)

T-1

OR-6
RW-1

Incorporation, Agents,
team members

Students will be able Lecture using

to appreciate the
power point
agency model and
presentation
monitoring costs
involved in running a
company

Behavioral Finance in
Corporates(Agency)

T-1

RW-1

agency

Students will be able Lecture using

to appreciate the
power point
agency model and
presentation
monitoring costs
involved in running a
company

Behavioral Finance in
Corporates(Monitoring)

T-1

Monitoring of Group
psychology,
Psychological barriers

Students will be able Lecture using

to appreciate the
power point
agency model and
presentation
monitoring costs
involved in running a
company

T-1

Meaning and structure

of market for
information,Noise and
deception

Students will be able Lecture using PPT

to make decisions as and Brain
portrayed in pricing Storming
theory

Lecture 29 Behavioral Finance in

Corporates(Noise)

T-1

Noise

Students will be able Lecture using PPT

to adjust this bias to and Brain
their buy and sell
Storming
decisions

Lecture 30 Behavioral Finance in

Corporates(Dividends)

T-1

Concept of Dividend

Students will be able Lecture and

to incorporate
discussion
dividend in their
decision making
process

T-1

Irrelevance of Dividend Students will be able Lecture using

to Value
to incorporate
power point
dividend in their
presentation
decision making
process

Week 10 Lecture 28 Behavioral Finance in

Corporates(The market for
Information, Noise and
Deception)

Week 11 Lecture 31 Behavioral Finance in

Corporates(Irrelevance of
Dividend to Value)

Lecture 32 Behavioral Finance in

Corporates(Prospect Theory)

T-1

OR-3

Prospect Theory of
dividends

Student will know

and appreciate the
prospect theory of
dividends.

Lecture using
power point
presentation

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Week 11 Lecture 33 Entrepreneurship(Meaning

and Structure)

T-1

Meaning and structure

of enterpreneur

Student will be able

to see psychological
trait of an
entrepreneur

Lecture using
power point
presentation

Week 12 Lecture 34 Entrepreneurship(BT

Model)

T-1

BT Model

Student will be able Lecture using

to put demand and
power point
motivation in the BT presentation
Model

Lecture 35 Entrepreneurship(BT
Model)

T-1

BT Model

Student will be able Lecture using

to put demand and
power point
motivation in the BT presentation
Model

Lecture 36 Current Issues in Behavioral

Finance(Key Behavioral
Variables and their impact
on the stock market
behavior)

T-1
R-1

OR-8

L36 L 37 L 38: Key

Behavioral Variables
and their impact on the
stock market behavior

L 36 L 37 L 38
Students will apply
all the bias to their
portfolio
construction.

Discussion, Brain
Storming

Week 13 Lecture 37 Current Issues in Behavioral

Finance(Key Behavioral
Variables and their impact
on the stock market
behavior)

T-1
R-1

OR-8

L36 L 37 L 38: Key

Behavioral Variables
and their impact on the
stock market behavior

L 36 L 37 L 38
Students will apply
all the bias to their
portfolio
construction.

Discussion, Brain
Storming

Lecture 38 Current Issues in Behavioral

Finance(Key Behavioral
Variables and their impact
on the stock market
behavior)

T-1
R-1

OR-8

L36 L 37 L 38: Key

Behavioral Variables
and their impact on the
stock market behavior

L 36 L 37 L 38
Students will apply
all the bias to their
portfolio
construction.

Discussion, Brain
Storming

Lecture 39 Discounting(Meaning and

Structure)

T-1
R-1

L39 L40 : Meaning and L39 L 40 Students

Power point and
structure of Discounting will be able to
Discussion
discount the value of
assets

Week 14 Lecture 40 Discounting(Meaning and

Structure)

T-1
R-1

L39 L40 : Meaning and L39 L 40 Students

Power point and
structure of Discounting will be able to
Discussion
discount the value of
assets

Lecture 41 Discounting(Variation in
Discount Rates)

T-1

Single outcome,
sequence of outcomes
and variation in discount
rates

Students will be able Lecture using

incorporate falling
power point
discount rates into an presentation
asset pricing model

Lecture 42 Discounting(Hyperbolic
Discount Factors)

T-1
R-1

Hyperbolic Discount
Factors

Students will able

able to use time
varying discount
rates

Discussion and
problem solving

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Week 15 Lecture 43 Discounting(Discounted

Utility Model)

T-1

L43-44: Reallocation of L 43 L44 Students

Case Analysis
Discounted utility model will be able to adjust
to weaknesses of the
model

Lecture 44 Discounting(Discounted
Utility Model)

T-1

L43-44: Reallocation of L 43 L44 Students

Case Analysis
Discounted utility model will be able to adjust
to weaknesses of the
model

SPILL OVER
Week 15 Lecture 45

Spill Over

Week 16 Lecture 46

Spill Over

Lecture 47

Spill Over

Lecture 48

Spill Over

Scheme for CA:

CA Category of this Course Code is:A0303 (3 out of 3)
Component

Weightage

Presentation - Individual

12.5

Assignment

43.75

Assignment

43.75

Details of Academic Task(s)

Academic Task

Objective

Detail of Academic Task

Nature of Academic
Task
(group/individuals)

Presentation Individual

To provide a
platform to every
student for
developing
communication
skill, confidence
and an analytical
bent of mind.

Students will give 5 minute presentation on any current issue Individual

related to subject/economy. Evaluation parameters will be as
per the rubrics (Communication 5 marks, Content 20 marks
and Confidence 5 marks)

Academic Task Marks

Mode
Offline

Allottment /
submission
Week

15 2 / 13

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Assignment 1

To develop
analytical ability to
apply knowledge
and also to check
the concept clarity
of the students

Individual assignment on the subjective topic i.e. Investors

Behavior, Investors approach towards financial planing etc,
assigned by faculty which will cover various operational
aspect of the subject. Evaluation parameters will be
applicable , Assignment 20 marks (Topic 2 marks,
Organization 2 marks, Quality of Information 5 marks,
Grammar, Usage, Mechanics, Spelling 5 marks, Interest
Level 2 marks, Neatness 2 marks and Timeliness 2 marks)
Viva 10 marks (Communication2.5 marks, Content 5 marks
and Confidence 2.5 marks)

Individual

Offline

30 2 / 6

Assignment 2

To check the
concept clarity as
well as analytical
thinking of the
students

Group of 3-5 students will be assigned on the

topic/problem/case provided by faculty. Evaluation will be
based on parameters followed by rubrics (Topic 2 marks,
Organization 2 marks, Quality of Information 5 marks,
Grammar, Usage, Mechanics, Spelling 5 marks, Interest
Level 2 marks, Neatness 2 marks and Timeliness 2 marks)
and viva for 10 marks

Group

Offline

30 7 / 12

Plan for Tutorial: (Please do not use these time slots for syllabus coverage)
Tutorial No.

Lecture Topic

Type of pedagogical tool(s) planned

(case analysis,problem solving test,role play,business game etc)

Tutorial1

investment behaviour basic thought process of new investores

Discussion

Tutorial2

Insider Trading and its impact

Discussion

Tutorial3

Investor Irrationality and Self-Defeating Behavior: Insights from

Behavioral Finance. (Case-3 available in course file as well as
ProQuest)

Case Analysis,Role Playing

Tutorial4

Investors Purchasing Behaviour via a Behavioural Finance

Approach. (Case-2 available in course file as well as ProQuest)

Case Analysis,Role Playing

Tutorial5

Behavioural Finance: Past Battle and Future Engagements. (Case- Case Analysis
5 available in course file as well as ProQuest)

Tutorial6

Assignment

Tutorial7

Behavioral Finance and NeuroFinance and Research Conducted in Case Analysis

This Area. (Case-7 available in course file as well as ProQuest)

Tutorial8

Subjective quiz

Subjective quiz

Tutorial9

Study of investment behavior

Discussion

Tutorial10

investment behaviour of new investors, when market is sestive.

Discussion

Tutorial11

Study of the drivers of the stock-market momentum and

assignment presentation

Discussion

5 minute presentation

After Mid-Term

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.

Tutorial12

Management game and assignment presentation

Business Game

Tutorial13

Doubt clearing and assignment presentation

Tutorial14

Discussion on 2008-2009 crisis and assignment presentation

Lehman Brother story and USA crisis and assignment presentation

Tutorial15

Quiz

Subjective quiz

An instruction plan is a tentative plan only and a teacher may make some changes in his/her teaching plan. The students are advised to use syllabus for preparation of all examinations. The students are expected to keep themselves
updated on the contemporary issues related to the course. Upto 20% of the questions in any examination/Academic tasks can be asked from such issues even if not explicitly mentioned in the instruction plan.