Financial Psychology and Behavioral Finance Certification Course

Why Select this Training Course?

Financial decisions affect a company’s significant health and growth; in today’s world, financial and business analysts ought to understand the financial markets and how this market reacts to specific changes. Aside from the crux of financial analysis and the financial statement, the market’s sentiments and the investors’ psychology need to be studied because these have a considerable impact on financial decisions. Behavioral Finance is an area that studies psychology’s effect on financial practitioners’ behavior.

What is the significance of behavioral finance?

Behavioral Finance is highly relevant to individuals, investors, analysts, financial advisors, and corporations. For example, this area exposes investors’ likely mistakes while identifying and selecting security, highlighting irrational investment decisions. For corporations, this area studies how the mindset of crucial financial personnel affects investment decisions. Also, this area aids financial regulators in trying to prevent market failure and avoidable crises.

What are the career opportunities present in behavioral finance and financial psychology?

These areas of study provide unlimited opportunities for people in the psychology and finance field. Some career opportunities for persons in this field include market research analysts that initiate economic theories founded in psychology. Also, consultants are qualified persons to provide professional advisory services on financial decisions, professors that remain in academia to serve as an instructor to teach the basics and rudiments of financial psychology, and policy advisers that work with the government to design in-depth and efficient communications, budgets, and proposals.

The Rcademy Financial Psychology and Behavioral Finance Certification Course are designed to provide participants with a perspective on the mindset and behavior of financial practitioners. This course espouses several decision-making sentiments and errors in information processing that affect overall financial decision-making.

Who Should Attend?

The Financial Psychology and Behavioral Finance Certification Course by Rcademy are suitable for personnel in finance and psychology and those looking to switch to this area. The following personnel should undertake this course:

• Investors: interested in making rational investment decisions
• Financial planners: responsible for managing funds and investments of individuals, and corporations
• Psychologists: interested in carving a niche in the world of finance
• Business analysts: responsible for reviewing business data to aid the financial decision-making of an organization
• Financial advisors: responsible for providing advisory services on finances to corporations and organizations
• Chief financial officers: are responsible for regulating and managing the finance of a corporation or organization
• Capital markets officials: responsible for buying and selling bonds to provide organizations with financial capital to thrive
• Board members of an organization: willing to understand and develop cognitive financial decisions
• Equity sales and portfolio managers: responsible for supervising portfolio trading and determining an organization’s level of risk concerning market conditions
• Investment professionals: responsible for making investment decisions and carrying out financial operations for corporations and organizations
• Professionals interested in building a career in fixed-income, equity, and trading

What are the Course Objectives?

The Financial Psychology and Behavioral Finance Certification Course by Rcademy will provide participants with extensive knowledge of the mindset of financial practitioners, biases that might influence economic decisions, and how these decisions affect individuals, corporations, and organizations. Upon completion of this course, participants would have learned the following objectives:

• Learn the concept of Behavioral Finance and its distinguishing features from modern finance and its impact on financial markets
• Identify self-deception biases, their reasons, and cautionary measures
• Understand cognitive biases and determine cause using life scenarios
• Analyze emotional biases, forms, and effects
• Recognizing herd bias and factors that truncate financial decision-making
• Demonstrate a clear understanding of modern portfolio theory and rational investor
• Develop a proper understanding of emotional finance
• Evaluate the psychology of risk and behavioral biases
• Understand and identify investor behavior

How will this Course be Presented?

The Financial Psychology and Behavioral Finance Certification is a participant-based course tailored to expand participants’ knowledge of psychology in finance and provide them with the necessary skillset and mindset to make rational and advantageous financial decisions. Also, to ensure maximum concentration and satisfaction of participants, practical learning approaches are employed, and renowned professionals teach this course with the needed skills and expertise to engage students in learning on the subject matter.

The Rcademy course on Financial Psychology and Behavioral Finance Certification adopts a theoretical and practical learning approach by providing participants with lecture notes, slides, workshops, quizzes, and a platform to express feedback on lessons taught and confirm maximum satisfaction on lessons learned.

What are the Topics Covered in this Course?

Module 1: Background to Behavioral Finance

• Definition of Behavioral Finance
• Foundation of Behavioral Finance
  – Psychology
  – Sociology
  – Finance
• Concepts of Behavioral Finance
  – Herd behavior
  – Mental accounting
  – Anchoring
  – High self-rating
  – Emotional gap
• Scope of Behavioral Finance
  – Investors
  – Corporations
  – Regulators
  – Markets
  – Educators

Module 2: Behavioral Finance Biases

• Experiential bias
• Overconfidence bias
• Disposition bias
• Familiarity bias
• Hindsight bias
• Framing bias
• Confirmation bias
• Narrative fallacy
• Loss aversion

Module 3: Psychology of Key Decision-Makers

• The psychology of the client and financial products marketing
  – Financial products design
  – Presentation of financial products
  – Communication, client loyalty, and satisfaction
  • The psychology of financial decision-makers: human resource management
    – Trading and dealing
    – Profiles of renowned traders and dealers
    – Policy capturing
    – Decision training and debiasing
    – Decision aiding

Module 4: Investment Advisory Services

• Risk ability
• Risk tolerance
• Risk awareness
• Structured advisory process
  – Needs analysis
  – Financial concept
  – Client profile
  – Strategy
  – Implementation

Module 5: Emerging Issues in Behavioral Finance

• Cultural differences in investor behavior
• Hofstede cultural differences
  – Power distance
  – Individualism
  – Masculinity
  – Uncertainty avoidance index
  – Long-term orientation
• Neurofinance: an emerging part of Behavioral Finance
• Market anomalies

Module 6: Behavioral Corporate Finance

• Financing decisions
• Capital budgeting
• Dividend policy decisions
• Initial public offerings (IPO)
• Mergers and acquisitions
• Agency conflicts and corporate governance
• Rational managers and irrational investors
• Irrational managers

Module 7: Application of Psychology in Financial Decisions

• Heuristics
• Emotional finance
• Psychology of risk
• Effects of Psychology on financial regulation and Policy
• Experimental finance
• Financial system operators
  – Arbitrageurs
  – Speculators
  – Hedgers
• Risk profiles of investors
  – Risk neutral
  – Risk takers
  – Risk-averse

Module 8: Investor Behaviour

• Trust behavior
• Derivative markets
• Institutional investors
• Pension participant behavior
• Cognitive abilities and financial decisions

Module 9: Behavioral Economics and Finance: Prospect Theory and Asset Pricing

• Prospect theory
• Bounded rationality
• Expected utility
• Probability weighting function

Module 10: Behavioral Finance: Theories and Evidence

• The limits of arbitrage
• Behavioral asset pricing
  – Investor sentiment
  – Under-and overreaction
  – Representativeness bias and ‘good’ companies
  – The equity risk premium
• Investor Behaviour and behavioral portfolio theory
  – Professional investors
  – Fiduciaries
  – Individual investors
• The Psychology of Risk
• Ethics