Investment, Securities and Psychology of Finance

Analyse financial decisions and the behaviour behind them

Psychology of Finance Dr Arman Eshraghi from Summer School UoE on Vimeo.

Dr Eshraghi explains how fascinating this topic is and what you can expect from the summer course Psychology of Finance


Part One: Investment and Securities

Finance plays a central role in almost all business decisions. Issues of valuation and risk are central to many decisions facing firms. Discounted cash flow techniques, time value of money, capital budgeting and risk, and other such concepts have entered into the business vocabulary and are used with varying degrees of knowledge and accuracy

 The first part of this course will provide a foundation in financial decision making – and an understanding of the techniques of financial analysis. It introduces the key elements of financial management and provides an outline of how to carry out financial evaluations of business decisions. It covers both descriptive material on financial markets, institutions and instruments, and analytical material on the assessment of projects and the valuation of securities.

Part Two: Psychology of Finance

The second part of the course is focussed on the psychology of finance, and is divided into three parts. The first part gives an introduction to several key strands of finance from a theoretical and practical perspective, which lays the foundation for for the second part in basic investments. These two parts together serve as an excellent launch pad for the final part in behavioural finance which brings finance and investment theory to life.

The final part has been designed to provide an overview of an exciting new and fast growing area in finance, the psychology of finance, which is based around the concept that investment decision–making and investor behaviour are not necessarily driven by “rational” considerations but instead by aspects of personal and market psychology. This final part will centre on the concept that our abilities to make complex financial decisions are limited due to the biases and errors of judgment to which all of us are prone. The course will introduce cognitive biases, discusses the impact of such biases on the financial decision-making process, and explores the behaviour of individual investors, fund managers, and corporate managers.

 

The University of Edinburgh also runs Postgraduate programmes on Finance and Investment. 

Course format

The course will be taught over a series of lectures and tutorials.The course gives students the opportunity to engage in self-directed learning and research aspects of the field. Students will be sent a pre-course reading list of core-texts and are expected to engage with this list prior to the course.

Course Organisers

Dr Arman Eshraghi is a Lecturer in Finance and Accounting at the University of Edinburgh Buiness School. His main research interests lie in the area of behavioural finance which includes broad topics such as the impact of psychological attributes (e.g., overconfidence) on the investment decisions and performance of professional investors. Having worked for three years in the banking industry, Arman also has keen research interests in the area of banking and corporate governance. Arman's research has been recognised by the Emerald/EFMD Outstanding Doctoral Research Awards, the AAAJ Awards for Excellence, the Young Scholar Award for research in financial discourse by BSI GAMMA Foundation, and recently by a Best Paper Award from Qualitative Research in Financial Markets. 

Dr Gbenga Ibikunle is a Lecturer in Financial Markets at the University of Edinburgh’s Business School. He serves as a Director on the Board of Fondazione European Capital Markets Cooperative Research Centre, a leading financial markets research centre in Europe. He is an expert on the Carbon Finance Unit of the World Bank's Partnership for Market Readiness Roster of Experts. He is a Fellow of the Higher Education Academy and an Academic Fellow at the University of St. Andrew's Centre for Responsible Banking and Finance. Gbenga’s research interests cover the general financial economics space, with greater focus on the microstructure of financial markets. His current research focuses on the microstructure evolution of financial markets against the backdrop of technology and policy innovations.

 

Assessment

Part One - Investment & Securities: 100% Coursework, which includes quantitative computations and a qualitatively assessed essay 

Part Two - Psychology of Finance: 100% Essay

By the end of this course, students should be able to:

  • Understand the differences between a behavioural finance perspective and a traditional finance perspective, along with  some of the fundamental concepts underlying modern finance theory
  • Identify the cognitive biases and errors of judgment which affect financial decisions
  • Recognise their own decision errors and understand the reasons for these, so they can avoid future decision errors and become a better investor or financial manager
  • Know how to apply the financial approach to evaluate decisions with uncertain outcomes
  • Understand financial decision-making within the organisation and some of the main techniques of financial analysis on which finance practice depends
  • Comprehend the criteria used to evaluate investments or capital projects
  • Apply simple discounted cash flow analysis to business decisions
  • Comprehend the role of capital markets and how debt and equity are valued in financial markets
  • Appreciate how risk affects project evaluation

A number of fee packages are available for the Summer School. Full fee information can be found on the Fees page.

All fee packages include tuition costs, the social programme, and your chosen accommodation type. Full information on our accommodation options can be found here.

Costs are provided per week. To calculate your total cost, select your package type, then multiply this cost by the number of weeks in your course.

e.g. A student selecting a Silver package for a 4-week course in July would calculate:

£757 x 4 weeks = £3028

To secure your place at the Summer School, you will be required to pay a deposit of £250 which can be reclaimed towards your fee package.

Please note that study in the UK may incur additional costs e.g. visa application fees.

If you submit your application and deposit before 31 January 2017, you can claim our special early bird rate. We also offer a range of special rates for students at our valued partner institutions. Please see our Fees page for more details.