Nefficient Markets An Introduction to Behavioral Finance

Learn about behavioral finance and cognitive biases, and how they impact the financial markets and our decisions

This textbook aims to fill the gap between those that offer a theoretical treatment without many applications and those that present and apply formulas without appropriately deriving them. The balance achieved will give readers a fundamental understanding of key financial ideas and tools that form the basis for building realistic models, including those that may become proprietary. Numerous carefully chosen examples and exercises reinforce the student’s conceptual understanding and facility with applications. The exercises are divided into conceptual, application-based, and theoretical problems, which probe the material deeper.

This textbook aims to fill the gap between those that offer a theoretical treatment without many applications and those that present and apply formulas without appropriately deriving them. The balance achieved will give readers a fundamental understanding of key financial ideas and tools that form the basis for building realistic models, including those that may become proprietary.

With the upsurge of interest in statistics in recent years it not infrequently happens that courses have to be taken by teachers whose primary interest has been another subject or whose personal experience has been more theoretical than practical. It is hoped that the wide range of data used in both examples and exercises will prove of value to them. O.N.D. assessors have not been slow to point out the limited use of suitable material in papers submitted to them. And examiners in general try to widen the scope of their question papers in their efforts to beat the pure crammers!