Portfolio Management and Behavioural Finance (BS3396) Complete Notes – Aston University provides a comprehensive resource of 41 pages, tailored for students delving into the complexities of investment strategies and the psychological factors influencing financial decision-making. This extensive guide is aimed at offering an in-depth exploration of both theoretical underpinnings and practical applications in portfolio management and behavioral finance.
Module Aims:
The primary objectives of the module are to introduce and explain the various concepts, theories, and techniques essential for making informed investment and portfolio management decisions. The coursework is designed to develop students’ skills in applying both passive and active investment strategies within a mean-variance framework, highlighting the fundamental risk-return trade-offs investors must navigate when diversifying portfolios. Additionally, it juxtaposes these strategic portfolio management decisions against the backdrop of behavioral finance, exploring how common irrationalities can affect individual decision-making processes in complex investment scenarios.
Module Learning Outcomes:
Upon completing this module, students will be equipped with the ability to:
- Identify different categories of investors and financial instruments: This includes an understanding of the diverse landscape of investment vehicles and the characteristics of various investor profiles.
- Demonstrate an understanding of the risk-return trade-off faced by investors: Students will gain insights into how risk and potential returns are balanced, a crucial aspect of investment decision-making.
- Apply active and passive asset allocation strategies in a mean-variance framework: Mastery of these strategies will enable students to optimize portfolio construction based on expected returns and risk considerations.
- Examine the impact of behavioral factors on portfolio selection and management: This involves analyzing how psychological influences and cognitive biases can affect market outcomes and investment choices, highlighting the relevance of behavioral finance in real-world financial settings.
These notes serve as an invaluable tool for students aiming to excel in the field of finance, particularly in roles involving portfolio management and financial analysis. By blending rigorous academic theory with practical strategy application, the notes prepare students to effectively navigate the challenges and opportunities in today’s dynamic financial landscape, fostering a deep understanding of both the numerical and psychological aspects of finance.
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