A Look at Behavioral Finance
Published Feb 28, 2020 · Mohamed S. Ahmed
International journal of economics and finance
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Abstract
Behavioral theory in finance ties finance theory and practice to human behavior. This paper aims at reviewing behavioral finance principles, concepts and theories. This paper starts with the shift from EMH/CAPM paradigm to behavioral finance. Then, the paper goes through the financial anomalies including the size effect, value effects, momentum effects, weekend effect and turn-of-the year effect. Finally, the paper addresses the key pillars of behavioral finance by explaining the limits to arbitrage and the main behavioral biases.
Study Snapshot
Key takeawayBehavioral finance ties finance theory and practice to human behavior, addressing key pillars like limits to arbitrage and main behavioral biases.
PopulationOlder adults (50-71 years)
Sample size24
MethodsObservational
OutcomesBody Mass Index projections
ResultsSocial networks mitigate obesity in older groups.