This course examines the relationship between financial theory and human psychology, highlighting how emotions, beliefs, and cognitive biases influence investment decisions and market behavior.

The course begins with an introduction to Modern Portfolio Theory and the fundamental principles of rational decision-making under conditions of risk. It then introduces the field of Behavioral Finance, which challenges the assumption of fully efficient markets and focuses on the psychological factors that lead to deviations from rational behavior.

The course aims to enable graduates to acquire the following general competencies:

The ability to search for, analyze, and synthesize data and information, using appropriate technologies where necessary.

Adaptability to new situations.

Decision-making skills.

The ability to work effectively as part of a team.

The ability to work in an international environment.

The promotion of free, creative, and inductive thinking.

Key topics covered in the course include:

Calendar Anomalies: How recurring behavioral patterns and market logic influence capital markets at specific time intervals.

Factors Affecting Investor Psychology: The impact of external conditions, such as sunshine and weather, on investors' psychological state and decision-making.

Cognitive and Emotional Biases: Including overreaction, behavioral biases, and recency bias, and their effects on investment decisions.

Prospect Theory and the limitations of the Efficient Market Hypothesis.

Behavioral Portfolio Theory and the Adaptive Market Hypothesis.

Emotions, Mood, and Investing: How fear, greed, sadness, regret, and pride influence investment decision-making.

Personality, Self-Esteem, and Self-Efficacy: Their role in shaping attitudes toward risk and stock market investment.

Demographic and Social Factors: Herd behavior and its influence on financial markets.

The Relationship Between Investor Sentiment and Market Performance: The interaction between emotions and bullish or bearish market trends.

Through case studies and empirical research findings, students will learn to identify the psychological patterns that lead to suboptimal investment decisions and to develop more balanced and effective investment strategies.

Finally, the course discusses the strengths and limitations of Behavioral Finance, together with practical approaches for improving investment behavior in environments characterized by uncertainty and risk.