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Biases and Portfolio Selection
  • Level Foundation
  • المدة 16 ساعات hours
  • الطبع بواسطة Rice University
  • Offered by

عن

Investors tend to be their own worst enemies. In this third course, you will learn how to capitalize on understanding behavioral biases and irrational behavior in financial markets. You will start by learning about the various behavioral biases – mistakes that investors make and understand their reasons. You will learn how to recognize your own mistakes as well as others’ and understand how these mistakes can affect investment decisions and financial markets. You will also explore how different preferences and investment horizons impact the optimal asset allocation choice. After this course, you will be more effective in overcoming biases to do the wrong things at the wrong times and tailoring an investment strategy that is best suited on your or your client’s profile and investment needs.

الوحدات

Welcome and Introduction

    • 1 Videos
    • 4 Readings
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1 Videos

  • Introduction and welcome to class

4 Readings

  • Grading Policy
  • How to use discussion forums
  • Meet & Greet: Get to know your classmates
  • Pre-Course Survey

Efficient Markets Hypothesis (EMH)

    • 3 Videos
    • 3 Readings
    • 1 Assignment
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1 Assignment

  • Efficient markets hypothesis

3 Videos

  • Efficient Markets Hypothesis (EMH)
  • Examples of market efficiency: Market efficiency in real time
  • Three Versions of Efficient Market Hypothesis

3 Readings

  • Watch market efficiency in real time
  • Real Time Market Efficiency
  • Lecture Handouts: Efficient Markets Hypothesis (EMH)

Are markets efficient?

    • 3 Videos
    • 2 Readings
    • 1 PeerReview
    • 1 Assignment
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1 Assignment

  • Are markets efficient?

1 Peer Review

  • Anomalies

3 Videos

  • Event studies
  • Anomalies
  • Mutual fund and analyst performance

2 Readings

  • Lecture Handouts: Are markets efficient?
  • EntreMed Case

Limits to arbitrage

    • 1 Videos
    • 2 Readings
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1 Videos

  • Smart investor should make markets efficient, right?

2 Readings

  • New Facts in Finance (optional)
  • Lecture Handouts: Limits to arbitrage

Module 1 Summary

    • 1 Videos
    • 1 Readings
    • 1 Discussion
    • 1 Assignment
Show info about module content

1 Assignment

  • Efficient markets and limits of arbitrage

1 Discussions

  • Forum question on market efficiency and passive strategy

1 Videos

  • Efficient Market Hypothesis

1 Readings

  • Module 1: Quiz solutions

Introduction

    • 1 Videos
Show info about module content

1 Videos

  • Introduction

Beliefs

    • 4 Videos
    • 3 Readings
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4 Videos

  • What are heuristics-driven biases?
  • Representativeness
  • Conservatism and anchoring
  • Overconfidence

3 Readings

  • Lecture handouts: Heuristics-driven biases
  • Additional heuristic-driven biases (required)
  • Heuristics and Biases in Retirement Savings Behavior (optional)

Frame dependence

    • 2 Videos
    • 3 Readings
    • 1 Assignment
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1 Assignment

  • Heuristic driven biases and frame dependence

2 Videos

  • Frame dependence
  • Mental accounting

3 Readings

  • Behaving Badly (optional)
  • Seven Sins of Fund Management (optional)
  • Lecture handouts: Frame dependence

Preferences

    • 4 Videos
    • 3 Readings
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4 Videos

  • Realistic preferences
  • Loss aversion or Prospect theory
  • Habit utility
  • Catching up with the Joneses

3 Readings

  • Lecture Handouts: Preferences
  • The Psychology and Neuroscience of Financial Decision Making
  • Psychology of what we do with our money (optional)

Module 2 Summary

    • 1 Videos
    • 1 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Biases and realistic preferences

1 Videos

  • Biases and realistic preferences

1 Readings

  • Module 2: Quiz solutions

Introduction

    • 1 Videos
Show info about module content

1 Videos

  • Introduction

Applications: The Aggregate Stock Market

    • 4 Videos
    • 1 Readings
    • 1 Assignment
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1 Assignment

  • Applications – the Aggregate Stock Market

4 Videos

  • Equity premium puzzle
  • Volatility puzzle
  • Closed-end fund puzzle
  • Examples from Closed-End Country Funds

1 Readings

  • Lecture handouts: Applications – the Aggregate Stock Market

Applications: The cross-section of average stock returns

    • 3 Videos
    • 1 Readings
    • 1 Assignment
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1 Assignment

  • Applications – The cross-section of average stock returns

3 Videos

  • Long-run reversals
  • Value effect
  • Momentum

1 Readings

  • Lecture handouts: Applications – The cross-section of average stock returns

Summary

    • 1 Videos
    • 2 PeerReview
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2 Peer Review

  • Inefficient markets and behavioral biases
  • Identifying trends in share prices

1 Videos

  • Summary

Introduction

    • 1 Videos
Show info about module content

1 Videos

  • Introduction

Investor behavior

    • 4 Videos
    • 1 Readings
    • 1 Assignment
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1 Assignment

  • Investor Behavior

4 Videos

  • Failure to Diversify
  • Naïve diversification
  • Excessive trading
  • Individual investors’ buying and selling decision

1 Readings

  • Lecture handouts: Investor behavior

Summary

    • 1 Videos
    • 2 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Applications: Investor behavior

1 Videos

  • Summary

2 Readings

  • Module 4: Quiz solutions
  • End-of-Course Survey

Auto Summary

"Biases and Portfolio Selection" is a foundational course in Business & Management, designed to help investors understand and overcome behavioral biases in financial markets. Taught by Coursera, this 960-minute course delves into common investor mistakes, their causes, and how they influence investment decisions. Learners will explore optimal asset allocation based on different preferences and investment horizons, ultimately crafting tailored investment strategies. Ideal for beginners, the course is available with a Starter subscription.

Arzu Ozoguz
Instructor

Arzu Ozoguz