The Psychology of Finance
- Course Code:
- Module 3
- Format:
- Online
- Duration:
- 8 weeks
Behavioral finance is the study of psychological influences on behavior of investors and financial analysts and how it impacts market outcomes. The certificate program will help you understand the thinking behind money management and financial trading.
Over an eight-week period, our course “The Psychology of Finance” will reveal the biases and volatility inherent to the human decision-making process in finance.
You will learn to:
- Describe concepts such as utility, probability weighting, the certainty effect, survivorship bias, risk, gains, and losses.
- Explain the causation/correlation error, the mental error in probability weighting, the consequences of the anchoring bias, overtrading due to overconfidence, the equity premium puzzle, and active vs. passive mutual funds.
- Evaluate subjective vs. absolute probabilities, overconfidence as the “mother of all biases,” and the framing and reversal of preferences.
You will be able to:
- Understand the psychology behind financial decisions made by business leaders and investors.
- Neutralize relevant biases.
- Make and encourage better financial decisions.
- Explain the consumer choice theory.
- Differentiate between mental models related to behavioral finance.
Stand-alone Option
This course may be taken outside of the certificate.