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2024/2025  BA-BHAAV2389U  Behavioral Finance

English Title
Behavioral Finance

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Quarter
Start time of the course Second Quarter, Third Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 90
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Jimmy Martinez-Correa - Department of Economics (ECON)
In autumn, the Course coordinator for this elective will be Jimmy Martinez-Correa.
In spring the Course coordinators for this elective will be Jimmy Martinez-Correa and Julie Marx.
Main academic disciplines
  • Finance
Teaching methods
  • Blended learning
Last updated on 09-02-2024

Relevant links

Learning objectives
The course will provide students with an understanding of how human psychology leads to biases and mistakes in the financial decisions of others and potentially of themselves. Through an awareness of these biases and mistakes, students will be better able to mitigate them as finance industry professionals, managers in non-financial firms, and investors of their own money.


To attain the top grade, students are required to have a good understanding of the major concepts and issues in behavioral finance. This includes the ability to:

• Identify and apply psychological concepts to financial markets and financial decision-making.
• Compare and contrast behavioral and non-behavioral explanations of financial phenomena.
• Apply the psychological and behavioral finance concepts to new problems.
Course prerequisites
The course is designed for students in the final year of their bachelor studies with a strong interest in finance and financial decision making. The course assumes knowledge of basic financial theory, as acquired in standard finance courses.
Behavioral Finance:
Exam ECTS 7,5
Examination form Home assignment - written product
Individual or group exam Individual exam
Size of written product Max. 10 pages
Assignment type Written assignment
Release of assignment The Assignment is released in Digital Exam (DE) at exam start
Duration 72 hours to prepare
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Winter and Spring
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content, structure and pedagogical approach

The objective of the course “Behavioural Finance” is to provide bachelor students with a broad understanding of how human psychology affects financial decisions, with specific reference to the impact on financial markets, corporate finance, and personal financial decisions.

There are two sides to the course. The "soft" side concerns the psychology of decision making. The "hard" side concerns modern empirical finance, as used in many hedge fund strategies, for example. The teaching of both sides focuses more on intuition and understanding rather than technical skills. The teaching is research-based, drawing on findings from the current academic literature, and covers a large quantity of material.


The course will provide students with tools to understand how people process information and (under/over-) react to it during regular and crisis times, as well as the consequences for financial markets and individuals.


For example, the course will provide students with the necessary tools to understand many important current relevant issues such ESG investing, the role of social media networks in asset prices, investment and savings decisions during crisis and turbulent times, and many others. For instance, the course provides the tools to understand: i) why people care about ESG and green investment options, ii) possible ethical dilemmas and trade-offs people have to make when investing this way, iii) why that is relevant for society, iv) how people make mistakes when making ESG investment decisions, and v) how we can help them.


Many of the concepts and theories we review in the course can be used to understand people's perception of societal challenges (e.g., green transition), how they might want to make a difference by investing in ways that reflect their values and how we can help people achieve their financial goals in a sound way conditional on their values.

Description of the teaching methods
The teaching is interactive and students are expected actively to participate in class discussions.
Feedback during the teaching period
We provide continuous feedback to students such that they can understand the concepts covered in the course and learn how to apply them both to real life situations/problems and to exam type questions. This continuous feedback is a key cornerstone of the learning process in the course.

For example, this feedback takes the form of exam type questions similar to previous semesters’ exam questions, as well as case studies designed by the instructor. These are normally based on real life problems and students try to solve the questions and discuss the cases in class. Afterwards, we discuss collectively potential solutions to the problems based on concepts discussed in the course.

Feedback can also take the form of discussions of real life problems that students sometimes identify themselves. Many students connect the concepts we cover in class with their own experiences.
Student workload
Class attendance 38 hours
Exam attendance 72 hours
Readings 83 hours
Exam preparation 83 hours
Last updated on 09-02-2024