Master of Management Studies (M.M.S) Behavioural Finance Syllabus - Mumbai University 2026

Course objectives

• 1 To introduce students to foundational concepts and theories of behavioural finance.
• 2 To equip students with analytical skills for understanding psychological biases affecting financial decisions.
• 3 To develop capabilities for applying behavioural finance insights to investment and financial management practices.
• 4 To foster understanding of investor psychology, market anomalies, and behavioural biases.
• 5 To cultivate strategic insights into leveraging behavioural finance for improved decision-making and market predictions.

Course outcomes

• CO1: Recall key psychological principles and biases influencing financial decisions.
• CO2: Explain common psychological obstacles that hinder rational financial decision- making.
• CO3: Analyze risks and outcomes associated with biased decision-making in financial contexts.
• CO4: Apply behavioural finance theories, including Expected Utility Theory, to real- world financial scenarios
• CO5: Evaluate the Efficient Market Hypothesis and construct reasoned arguments using behavioural case studies.

Unit 1 CO1, CO2, CO3 · 10 hours

Introduction Introduction to Behavioural finance – Nature, scope, objectives and application; Investment Decision Cycle: Judgment under Uncertainty: Cognitive information perception - Peculiarities (biases) of quantitative and numerical information perception - Representativeness – Anchoring - Exponential discounting - Hyperbolic discounting

Unit 2 CO2, CO3, CO4 · 12 hours

Utility/ Preference Functions Expected Utility Theory [EUT] and Rational Thought: Decision making under risk and uncertainty - Expected utility as a basis for decision- making – Theories based on Expected Utility Concept - Investor rationality and market efficiency.

Unit 3 CO3, CO4, CO5 · 16 hours

Behavioural Factors and Financial Markets The Efficient Markets Hypothesis- Fundamental Information and Financial Markets-Behavioural factors and Corporate Decisions on Capital Structure and Dividend Policy - Capital Structure dependence on Market Timing -. Systematic approach to using behavioural factors in corporate decision making. External Factors and Investor Behaviour: Mechanisms of the External Factor influence on risk perception and attitudes - Connection to human psychophysiology and emotional regulation Active portfolio management – the source of the systematic underperformance.

Unit 4 CO3, CO4, CO5 · 16 hours

Behavioural Corporate Finance & Neuro Finance Behavioural factors and Corporate Decisions on Capital Structure and Dividend Policy - Capital Structure dependence on Market Timing -. Systematic approach to using behavioural factors in corporate decision making. External Factors and Investor Behaviour: Mechanisms of the External Factor influence on risk perception and attitudes - Connection to human psychophysiology and emotional regulation Active portfolio management – the source of the systematic underperformance. Overview of Neuro-scientific Methods in studying financial decision making

Unit 5 CO4, CO5 · 6 hours

Discussion and Analysis of Cases Studies on Behavioural finance in Markets - Examples “Manias, Panics and Crashes”, by Charles Kindleberger; “The Great Crash 1929”, by John Galbraith; “When Genius Failed” & “Origins of the Crash”, by Roger Lowenstein; “The Big Short”, by Michael Lewis; “Too Big To Fail”, by Andrew Ross Sorkin

Textbooks

• 1 Chandra, P. (2020), Behavioural Finance, Tata Mc Graw Hill Education, Chennai (India).7 th Edition
• 2 Ketan Vira (2024), Behavioural Finance, AG Publishing House (AGPH Books), India