Behavioral and Personal Finance

By Prof. Abhijeet Chandra | IIT Kharagpur

Learners enrolled: 5209

This course will cover the behavioral aspects of financial decision making and personal finance planning. The students shall be introduced to the theoretical, mathematical, and empirical underpinnings of anomalies and biases that investors face in financial markets. The course also focuses the behavioral approach of investment and personal financial planning.

Through this course, we do not hope to make you ‘financially literate’ or advise you what to do with your money. Instead, the course will help you explore some of the most common biases and mistakes that we, as individuals, make while dealing with money (or something of that sort). With the help of discussions on related theories, mathematical illustrations, and experimental exercises, participants should be able to become familiar with terminology, techniques and approaches used in behavioralized financial services industry. Most of techniques can also be relevant to traditional financial advisory services, the products and services in the fintech domain, and public policy.

INTENDED AUDIENCE : • BTech/BE student with a basic knowledge of Economics and Statistics

• Students of MBA/MCom/MA (Eco)/BBA/BMS

PREREQUISITES : Nil

INDUSTRY SUPPORT : Companies from BFSI (Banking, Financial services & Insurance) sector:Edelweiss Fin. Services Ltd.,

Barclays India, Yes Bank, CFA Institute, Capital First Ltd., Nomura, and other financial advisory firms,

including investment banking companies such as JPMC, DB, etc.

Summary

Course Status :	Completed
Course Type :	Elective
Duration :	8 weeks
Category :	Management Studies
Credit Points :	2
Level :	Undergraduate/Postgraduate
Start Date :	27 Jan 2020
End Date :	20 Mar 2020
Enrollment Ends :	03 Feb 2020
Exam Date :	29 Mar 2020 IST

Note: This exam date is subjected to change based on seat availability. You can check final exam date on your hall ticket.

Page Visits

Course layout

Week 1 : Introduction to behavioral economics and finance: the concept of expected utility, the vonNeumann Morgenstern framework.

Week 2 : Non-expected utility preferences and its applications in finance.

Week 3 : Beliefs, biases and heuristics in financial markets.

Week 4 : Basics of personal finance, financial planning, and budgeting.

Week 5 : Investment decision making and behavioral finance

Week 6 : Investment strategies for individual investors.

Week 7 : Purchasing decisions, consumer credit and related issues.

Week 8 : Alternative investment and structured finance.

Books and references

1. Behavioral Finance, William Forbes, Wiley, 2009.

2. Behavioral Finance: Psychology, Decision-Making and Markets, L. F. Ackert and R. Deaves, South-Western College Publication.

3. Investor Behavior: The Psychology of Financial Planning and Investing, H K Baker and V Ricciardi, Wiley, 2018.

4. Personal Finance (11th ed.), Jack Kapoor, Les Dlabay and R. J. Hughes, McGraw Hill.

Instructor bio

Prof. Abhijeet Chandra

IIT Kharagpur

As assistant professor at VGSoM, IIT KGP., I offer courses in Corporate Finance, Investment Management, and Management Accounting to UG, PG, and Doctoral level student. I have done BCom. (H), MCom, and PhD in Accounting and Finance area. I also have completed post-doctoral research in behavioral finance and asset pricing. My major research interests are in financial economics (behavioral finance, asset pricing, and economics of derivatives) and individual decision making under risk and uncertainty (prospect theory, risk preferences, irrationality). I do both theoretical and empirical work and am currently also involved in experimental work. The core issues that I have been working on are the study of behavioral dimension of investment decision-making, from both individual and institutional perspectives, and how it affects the asset prices and market mechanism. My research interests are based on the behaviouralized inquiries related to the emerging research area of behavioral finance which draws its ideas from various disciplines including economics, finance, psychology, sociology and so on.

Course certificate

• The course is free to enroll and learn from. But if you want a certificate, you have to register and write the proctored exam conducted by us in person at any of the designated exam centres.

• The exam is optional for a fee of Rs 1000/- (Rupees one thousand only).

• Date and Time of Exams: 29th March 2020, Morning session 9am to 12 noon; Afternoon Session 2pm to 5pm.

• Registration url: Announcements will be made when the registration form is open for registrations.

• The online registration form has to be filled and the certification exam fee needs to be paid. More details will be made available when the exam registration form is published. If there are any changes, it will be mentioned then.

• Please check the form for more details on the cities where the exams will be held, the conditions you agree to when you fill the form etc.

CRITERIA TO GET A CERTIFICATE:

• Average assignment score = 25% of average of best 6 assignments out of the total 8 assignments given in the course.

• Exam score = 75% of the proctored certification exam score out of 100

• Final score = Average assignment score + Exam score

YOU WILL BE ELIGIBLE FOR A CERTIFICATE ONLY IF AVERAGE ASSIGNMENT SCORE >=10/25 AND EXAM SCORE >= 30/75.

• If one of the 2 criteria is not met, you will not get the certificate even if the Final score >= 40/100.

• Certificate will have your name, photograph and the score in the final exam with the breakup.It will have the logos of NPTEL and IIT Kharagpur. It will be e-verifiable at nptel.ac.in/noc.

• Only the e-certificate will be made available. Hard copies will not be dispatched.