CHECK THESE SAMPLES OF The Influence of Behavioural Finance on Stock Markets
Topic: Behavioural Finance Name Professor Institution Course Date Many studies in the area of behavioural finance suggest that individual investors make systematic errors due to behavioural biases.... Financial markets are very competitive and research studies note that there are little or no externalities from those participating in the market.... The existence of irrational investors has resulted in the markets being driven by emotions rather than logic (Dreman, Johnson, MacGregor & Slovic, 2001, p....
3 Pages
(750 words)
Essay
In the similar context, the pattern of the stock markets of Hong Kong did reveal a turn-of-the-year effect owing to the fact that there were no capital gains from taxes.... The Momentum Effect and Market Efficiency) Table of Contents Introduction 3 Definition of Turn-of-the-Year Anomaly 3 Pattern of Turn-of-the-Year Anomaly 4 Discovery of Turn-of-the-Year Anomaly 5 influence of Turn-of-the-Year Anomaly on Market Efficiency 5 Reasons behind Turn-of-the-Year Anomaly 6 Why Turn-of-the-Year Anomaly Matters for both Academics and Practitioners 7 Persistence of Turn-of-the-Year Anomaly 7 Conclusion 8 References 9 Introduction Anomaly defines such occurrences in the market when actual outcome under a certain set of norms is dissimilar from the estimated outcome....
7 Pages
(1750 words)
Essay
However, Shiller (2013) argues that the behavioural finance disproves the theory stating that individuals are impacted by more factors than just objective figures, including all kinds of subjective factors like, human biases and inconsistency in behaviour, thought and irrationality, when they are faced by market uncertainties.... As a result of the financial crisis, Mehl (2013) examined that the equity markets had also shown a lot of volatility and this had instilled unpredictability among the investors....
12 Pages
(3000 words)
Literature review
Within the context of the modern information age; given the pervasive presence of journalists reporting, pundits opening, and bloggers ranting, it is easy to infer the significant social influence wielded upon the financial markets by the media.... In the following paper “Social Influences in the stock Market” the author discusses the issue that when it comes to individuals investing in the stock market, many people erroneously think that investor decisions are driven by purely economic factors....
3 Pages
(750 words)
Assignment
Hypothesis being the Greek word for "assumption", the Efficient markets Hypothesis assumes that capital markets (the stock or equity market is one example) are efficient.... Fama argues that investors make rational decisions based on three types of information (weak, semi-strong, and strong), stock prices behave unpredictably, sellers cannot earn windfall profits and beat the market in a sustained manner, and therefore, capital markets are efficient.
In subsequent studies, Fama (1998; with French 1992/1993/1996) and Malkiel (1995) showed empirical evidence proving these conclusions and the observation that in efficient markets, only those that arrive first can earn above average returns....
5 Pages
(1250 words)
Essay
ORH originated from the field of applied psychology and is a statement of behavioural prediction that people tend to overreact to dramatic news and events, regardless of whether these events are positive or negative.... The Hongkong economy has been identified as the one with the freest and, in the absence of artificial market barriers that cause inefficiency, therefore the most efficient financial markets, as it was given the highest Index of Economic Freedom1 (Heritage, 2006)....
7 Pages
(1750 words)
Essay
This report discusses the subject of behavioral finance, which has an effect on markets operation in books Chaos and Order in the Capital Market by Edgar Peters and Fractals and scaling in finance by Benoit Mandelbrot.... Louis Bachelier established this model in 1900 with an aim of understanding modeling fluctuations of prices in the financial markets.... The author describes ways of applying Ratio analysis in various markets.... In his research, he found out that non-periodic cycles and fractal structure outlay evidence of the fact that the capital markets being nonlinear systems....
8 Pages
(2000 words)
Book Report/Review
This evident in various stock exchange markets which investors have assumed on making the best decisions.... The intention of the assignment "Capital Asset Pricing, Behavioral Finance, and Market Hypothesis" is to discuss a few introductory concepts in the stock exchange market and finance overall.... Additionally, the writer will discuss the application of psychological theory in the stock market.... ehavioral financeThis is a financial field which proposes the use and application of psychology-based theories which are used to explain the anomalies in the stock market....
1 Pages
(250 words)
Assignment