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Course modules will pause after Friday, December 23, 2022, and resume on Monday, January 2, 2023. Enjoy the holiday break!
About the Course
Over an eight-week period, the course will reveal the biases and volatility inherent to the human decision-making process in finance.
You will learn to:
- Describe concepts such as utility, probability weighting, the certainty effect, survivorship bias, risk, gains, and losses
- Explain the causation/correlation error, the mental error in probability weighting, the consequences of the anchoring bias, overtrading due to overconfidence, the equity premium puzzle, and active vs passive mutual funds
- Evaluate subjective vs absolute probabilities, overconfidence as the “mother of all biases,” and the framing and reversal of preferences
You will be able to:
- Understand the psychology behind financial decisions made by business leaders and investors
- Neutralize relevant biases
- Make and encourage better ﬁnancial decisions
- Explain the consumer choice theory
- Differentiate between mental models related to behavioral finance
Behavioral finance proposes that psychological influences and biases affect the financial behaviors of investors and financial practitioners. All types of market anomalies, especially those related to the stock market, can be explained through these psychological behaviors. In a time of increased uncertainty and market volatility, behavioral finance is rapidly growing in practice. Advisors seek to incorporate this analysis into their wealth management processes to improve the client experience, deepen relationships, and deliver better results. In a recent survey of financial advisors, 81% of them said they were using behavioral finance techniques to build their clients’ portfolios and communicate with them.
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The University of Chicago Approach to Online Learning
Our online learning programs are crafted with your specific needs in mind. Programs combine e-learning with live, interactive sessions to strengthen your skill set while maximizing your time. We couple academic theory and business knowledge with practical, real-world application. Through online learning sessions, you will have an opportunity to grow your professional network and interact with University of Chicago instructors and your classmates.