Behavioral Finance (MASTER)

1. Investor behavior and anomalies in financial markets
1.1. Review of modern portfolio theory and market anomalies
1.2. Limits to arbitrage
1.3. Prospect theory, behavioral biases, anchoring and mental accounting
1.4. Equity-premium puzzle, predictability of stock returns, size premium, momentum effect, closed-end funds puzzle, insufficient diversification of the investments, excessive trading, etc.
2. Behavioral Corporate Finance
2.1. Review of corporate finance policies based on neoclassical corporate finance theory
2.2. Irrational investors and rational managers
2.3. Rational investors and irrational managers
2.4. Implications for corporate financing, investments and other firm policies (payout, firm name, earnings management, executive compensation, stock splits, etc.)