Behavioral Finance Jay R. Ritter Cordell Professor of Finance University of Florida P.O. Box 117168 Gainesville FL 32611-7168 http://bear.cba.ufl.edu/ritter jay.ritter@cba.ufl.edu (352) 846-2837 Published‚ with minor modifications‚ in the Pacific-Basin Finance Journal Vol. 11‚ No. 4‚ (September 2003) pp. 429-437. Abstract This article provides a brief introduction to behavioral finance. Behavioral finance encompasses research that drops the traditional assumptions of expected utility
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BIG JIM’s GYM Big Jim is in the body building business for many years in Glendale ‚ California. The gym is for both memn and women and has seperate facilities for both the segments. All the gyms have been located in a complex which has a pizza corner just above the gym . This might be a strategy wherein pizza lovers are given a soft signal of the health fitness they need to care about and there by giving a base of custmers to the Big Jim’s Gym. The moto of the gym is “full range body building and
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Week 2 Sources of Finance 1) Introduction It was explained in week 1 that this week’s lectures will focus primarily on institutions that provide finance. Finance has been defined by Chadwick and Kirkby (1995‚ p 38) in their book Financial Management (first edition‚ publisher Routledge) as a “system of costs and risks”. As we will see throughout the course‚ the notion of risk from an investor’s point of view is related to whether there is the accrual of the financial returns that are anticipated
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Section 1 – Sources of Finance There are 4 main types of business ownership: • Sole trader • Partnership • Private limited company (Ltd) • Public limited company (Plc) Each of these types of business needs to raise finance for capital investment Sole Trader This is a business that is owned by one person. Sole Traders are responsible for raising all the finance to set up and run the business. Usually a sole trader would be for a small business/ (businesses with a flat
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Jim Crow Laws Between 1877 and the mid 1960s‚ the Jim Crow laws‚ enacted by many U.S. states after the reconstruction period‚ kept blacks and whites separate. Jim Crow laws were not just laws‚ they were a way of life. These laws are a horrific reminder of the racial barriers and segregation that oppressed an entire population. These laws were first established in the South. They then spread widely throughout the United States. The Jim Crow laws were legislation that banned blacks and whites from
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fund? 2. Describe the risk associated with making an investment in an international growth fund. Identify the risks that would be common to domestic an international funds‚ and those risk that would be unique to an international fund. 3. Discuss how the fact that foreign companies are not subject to the same accounting‚ auditing‚ and financial reporting standards and practices as U.S. companies poses a risk not typically encountered when investigating in the stock of U.S. companies. 4. Consider
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CONCEPT QUESTIONS - CHAPTER 14 14.1 List the three ways financing decisions can create value. 1. Fool investors 2. Reduce costs or increase subsidies 3. Create a new security 14.2 How do you define an efficient market? It is a market where current prices reflect all available information. Name the three foundations of market efficiency? Rationality‚ independent deviations from rationality and arbitrage 14.3 How would you describe the three forms of the efficient-market hypotheses? 1.
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Conflict occurs when two or more people who‚ despite their first attempts at agreement‚ do not yet have an agreement or a course of action‚ usually because their values‚ perspectives and opinions are contradictory in nature. The credit and accounting departments are interdependent and share a common goal in the company but conflict arose because of the increase in sales caused the credit and accounting offices to become busier and this has caused conflict between Linda Sims‚ the accounting department
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irrational as the effect of the irrationally optimistic investors will be neutralize by the effect of irrationally pessimistic investors immediately. Arbitrage The last assumption is that investors will scramble for any arbitrage chance which means “buy low sell high”. When a piece of information is announced‚ all investors will adjust the expected stock price at the same level and immediately buy the “underpriced” stock or sell the “overpriced stock” to maximize their earnings. Although there are some
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STUDY OF BEHAVIORAL FINANCE A PROJECT REPORT BATCH: 2010-12 To Dr.Sampada Kapse Program Co-ordinator (PGDM) In partial fulfillment of the requirements of Tolani Institute of Management Studies‚ Adipur For the award of the degree of Post Graduate Diploma in Management [pic] Tolani Institute of Management Studies PB No.11‚ LilashahKutiya Road‚ Adipur – 370 205 (Kachchh). Ph: (02836) 261466‚ 262187 Email: tims@tolani.org‚ www.tolani.org/tims JUNE 2011 acknowledgement
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