John R. Nofsinger

Publisher: Prentice Hall
Copyright: 2008
Format: Paper; 128 pp

ISBN-10:	0132302349
ISBN-13:	9780132302340

Our Price: £21.99
Status: Instock
Published: 02 Aug 2007

Chapter 1 — Psychology and Finance

Chapter 2 — Overconfidence

Chapter 3 — Pride and Regret

Chapter 4 — Risk Perceptions

Chapter 5 — Mental Accounting

Chapter 6 — Forming Portfolios

Chapter 7 — Representativeness and Familiarity

Chapter 8 — Social Interaction and Investing

Chapter 9 — Emotion and Investment Decisions

Chapter 10 —Self-Control and Decision Making

How much coverage does your current text provide on risk and the decision-making process behind investments?  Do you ever discuss the correlation between psychology and financial risk in the classroom?

The book is one of the first texts to delve into the fascinating field of financial investment and its implications on human emotion.  Few texts provide this information because traditional finance has focused on developing the tools that investors use to optimize expected return and risk. This endeavor has been fruitful, yielding tools such as:

•    Asset pricing models; Pg. xx
•    Portfolio theories; Pg. xx
•    Option pricing; Pg. xx

Although investors should use these tools in their investment decision-making, they typically do not. This is because psychology affects our decisions more than financial theory does.

What is your take on the relationship between psychological biases and the ability to make sound investment decisions? What topics are most important to you in discussing this topic in the classroom?

Nofsinger’s 3rd edition emphasizes psychological bias and how to overcome them to increase your wealth. You will notice that most of the chapters are structured similarly:

•    Psychological Bias is first described and illustrated with everyday behavior (like driving a car); Pg. xx
•    The effect of the bias on investment decisions is then explained; Pg. xx
•    Last, academic studies are used to show that investors do indeed exhibit the problem; Pg. XX

This text is available for personalization in the PHCBR custom database program.  Select only the chapters you require or supplement with recommended case studies all under one cover.  CLICK HERE to go directly to the PHCBR book-build site or visit our product page for additional information at pearsoncustom.com/business.