Behavioral Finance Assignment Help
The theory regarding customized behavioral finance is a sub-disciplinary field of economics that tries to explain the stock-market anomalies by taking into consideration the information structure and characteristics of market participants which influence their decision-making processes. It deduce heavily from psychology, cognitive sciences and behavioral theories in explaining why market participants make mistakes in their investing decisions despite being rational economic agents. The theories in this field have gained much importance in recent years in American academia. Students of management, mainstream economics, corporate finance and statistics have to write behavioral finance assignment and in such situation behavioral finance assignment help is needed.
What Do Behavioral Finance Theories Explain?
We can define Conventional behavioral finance theories by economic agents (for instance humans) as rational subjects. As such classical behavioral financial theories like Capital Asset Pricing Model (CAPM) and Efficient Market Hypothesis (EMH) which take human beings as ideal rational subjects showing perfect rational behavior in optimal market conditions, cannot explain stock market anomalies. Some of the theories in this field are related to stock market are, the January effect (stocks that under performed in previous financial quarters tend to outperform in January), low book value (stocks with below average prices tend to outperform higher ones), Dogs of the Dow (investing on 10 of the most popular stocks of Dow Jones) and stock herding (buying stocks are mainly based on market popularity rather than individual thinking). We test these investing strategies while writing behavioral finance assignment.
However, typical finance, behavioral finance theories try to analyze and explain such phenomenon by taking into account insights borrowed from cognitive sciences and psychology. Don’t get stuck choose us with your behavioral finance assignment then read through the main research areas carefully in order to get behavioral finance assignment help.
This field typically works with a number of human behavioral patterns related to consumer purchases and market driven investments. Below written are some of the major behavioral finance theories are :
Stock Market Behavior : The strategy regarding key investment are addressed by behavioral finance theories. When you study behavioral finance theories, you realize the ups and downs of the stock market. The identical behavior in finance theories relating to retention and possession of stocks are also addressed in behavioral finance assignment One such phenomenon is ‘bird in the bush’ paradox which indicate the asymmetry between decisions to acquire new resources and keeping the older ones. One more famous behavioral finance theory that is needed to write behavioral finance assignment is ‘loss aversion’ i.e. reluctance to let go of stocks even if they bring very little profits. In totality, it is seen that one of the most interesting behavioral finance theories is the ‘equity premium puzzle’ which is based on the historical observation that people tend to invest more on the risky private stocks than on the relatively risk free government bonds. This theory is vitally important for behavioral finance assignment writing.
Quantitative Financial Analysis : one more well known area in behavioral finance assignment writing is using quantitative methods to analyse behavioral finance theories.
Game Theory : This theory on behavioral finance uses mathematical models to define strategies of cooperation and conflict between rational decision-makers in zero sum games. Students who require behavioral finance assignment help should try to have a good grasp of all the behavioral finance theories including behavioral finance game theory.
Evolutionary Economics : One more area of behavioral finance theory where students often face questions in their behavioral finance assignments is evolutionary economics. Behavioral finance theory uses angle from evolutionary biology to explain limitations of rational economic theories related to behavioral finance theories. While making this assignment on, behavioral finance assignment we take into account changes in the economic processes and institutions and uses the methodology of evolutionary biology pioneered by Charles Darwin to explain the changes from within. Customized Behavioral Finance Assignment Help
What Are The important Points Of Criticism Of Behavioral Finance Theories?
Behavioral finance assignment help is usually needed by students on behavioral finance theories, it is imperative that you should be well aware of the complications of writing behavioral finance assignment. In spite of the academic success in behavioral finance assignment writing, behavioral finance theories have garnered much criticism from traditional economists.
The important points of criticism can be summarized under the following heads :
The discipline of Ghettoization : Despite the fact behavioral finance theory borrows heavily from cognitive sciences, psychology and economics, these behavioral finance theories are tested while writing behavioral finance assignment in other academic disciplines like political science, sociology and anthropology. Concluded by critics was that these behavioral finance theories needed for behavioral finance assignment might lead to the increasing ‘ghettoization’ or isolation of the discipline. This, despite the fact that much of the discipline is heavily dependent on the work of social psychologists like Daniel Kahneman, Amos Tversky and political scientists like Herb Simon. They(critics) also suggest that opening up to other disciplines will help behavioral finance theories to be more interdisciplinary and interesting to write behavioral finance assignment.
Ignorance of rationality : Writing a behavioral finance assignment is the biggest point of criticism against behavioral finance theory should be discussed. In this theory, it includes that humans are essentially rational being making choices in order to satisfy the goal of self-maximization. But behavioral finance theories can be completely ignorant at this point, choosing instead to harp upon moments of failure of rational behavior. These points are vitally major for behavioral finance assignment.
Individualist in nature : The theories of behavioral finance explain the individual decisions but fail to account collective decisions and outcomes. Individual choices, say critics, are influenced by society and the community. Our assignment writing takes into account the social forces that influence individual decisions. For example, it has been shown that many people invest in certain stocks and bonds based on recommendations of friends and neighbors. Usually the person writing assignment on this find difficulties with this behavioral finance theory so our behavioral finance assignment help experts provide finance homework help. Customized Behavioral Finance Assignment Help
Limited areas of research : Research field of behavioral finance theory is extremely limited in nature. It is fiercely concerned with those moments where human cognition and calculation fails. When we fail to come up with rational behavior that interacts with a host of other social and psychological factors: emotions, status competition etc. One should take expert behavioral finance assignment help while writing behavioral finance assignments on behavioral finance theories.
Failure to explain aggregate outcome : The assignment on behavioral finance theory is good at explaining individual outcomes, but these behavioral finance theories fail to explain whether these individual outcomes add up to an aggregate social outcome unlike other branches of social sciences like economics, social anthropology and political science. Thus, these behavioral finance theories cannot explain for instance, the phenomenon where large number of people falls prey to ‘hot hand fallacy behavioral finance assignment help on behavioral finance thesis or on any of the allied disciplines of economics, political science and anthropology, you can now consult the behavioral finance assignment h (a fallacious belief that a person who has cultivated some success in some random event will experience the same on additional attempts) or ‘availability bias’ (giving preference to recently observed phenomenon than past events).
Despite such criticisms, there is no doubt that behavioral finance theory has shown much promise in explaining market anomalies. However, behavioral finance assignment writing needs to take into account perspectives from allied disciplines, becomes less individualistic and more social. Our behavioral finance writing assignment help aid you with your essays, dissertations and any kinds of homework behavioral finance assignment help. Customized Behavioral Finance Assignment Help
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