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Investment Beahvioral Finance

Behavioral Finance / Bahavioral Bias

Behavioral Finance / Bahavioral Bias

51
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Nicolas Steinmann
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Nicolas Steinmann
This flashcard set delves into the psychological aspects influencing financial decisions, tailored for university-level students. It explores how people's biases, such as overconfidence, loss aversion, and herd behavior, impact investment choices and risk assessment. The set covers key concepts like convexity, variance, and different types of biases, providing examples and formulas to illustrate their effects. Investors and finance professionals can benefit from understanding these behavioral patterns to make more informed and rational investment decisions, avoiding common pitfalls in financial markets.
Cartes-fiches
51
Utilisateurs
3
Langue
Anglais
Catégorie
Finances
Niveau
Université
Créé / Mis à jour
15.01.2022 / 17.10.2023

Pile: Formeln

  • 1  / 7

Cartes-fiches

Formula for

Relative Risk Aversion RRA

Absolute Risk Aversion ARA

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Proving if u(x) presents a valid utility function

utility is increasing with wealth at a decreasing rate:

u’(x) > 0 Mehr Reichtum mehr Nutzen

u’’(x) < 0 Nutzenwahrnehmung nimmt mit zunehmendem Gewinn ab

Formula to calculate numbers of contract fo a perfect hedge

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DF to spot rates with semiannual compounding

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Forward rates with annual compounding

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Forward rate with semiannual compounding

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Spot rates to 6 month forward rates

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