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Behavioral Finance - Science topic

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Will cryptocurrencies return to dynamic growth after the current energy crisis, the downturn in the economy caused by high inflation and the stock market slump?
Will the currently developing crises lead to a major collapse in the development of cryptocurrencies or will cryptocurrencies return to dynamic growth in the future?
Will the currently developing crises (rising inflation, energy crisis, stock market slump, food crisis, possibly also stagflation in 2023) lead to a serious collapse in the development of cryptocurrencies or will cryptocurrencies return to dynamic development in the future?
What do you think?
What is your opinion on the subject?
Please reply,
I invite you all to discuss,
Thank you very much,
Best regards,
Dariusz Prokopowicz
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Thank you for your recommendation
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How can an effective investment strategy involving a combination of fundamental analysis and technical analysis be built in the analysis of stock markets or other investment assets priced in the capital markets?
On what premises, model assumptions can an effective investment strategy involving a combination of fundamental analysis and technical analysis in the analysis of stock markets or other investment assets priced in the capital markets be designed?
Some stock market investors, citizens and business entities, investment fund managers, investment banks operating in the capital markets use both technical analysis and fundamental analysis in their analysis and investment activities. The use of both of these analyses is usually based on the assumption that these two significantly different analyses can complement each other. Fundamental analysis consists of, among other things, several analytical segments on specific spheres of the economy, impact factors and risks acting on the operation of certain business entities, internal and external impact factors. In the environment of the company and the enterprise, the closer environment is analyzed, e.g. the competitive environment, relations with key competitors, with business counterparties, customers, with recipients of product and service offerings, with suppliers of raw materials, prefabricated components, subassemblies and other production factors necessary for business operations, with cooperators, with financial counterparties, lenders, etc. Strategic analysis, including, for example, SWOT analysis, marketing analysis, technical-economic analysis, organization analysis, financial analysis, including ratio analysis based on financial indicators based on quantitative data contained in financial statements, also plays an important role in fundamental analysis.
Technical analysis, on the other hand, involves analyzing changes in the rates and trading volumes of securities, currencies or commodities. This analysis is concerned with studying and interpreting the shapes of charts to forecast future prices (rates) based on an analysis of past price formation. Unlike fundamental analysis of a company, which takes into account both information about the global, macroeconomic, regional and industry environment in which it operates, as well as reports announced by the company itself, in the case of technical analysis these are not taken into account in the investment decision-making process. All the information needed for technical analysis is read directly from charts showing the historical price changes of the security, currency or raw material under analysis. Technical analysis assumes that stock market phenomena precede economic phenomena in time, and that the market is a mechanism for discounting the future. Technical analysts prefer to analyze the trend of the market instead of statistical data. Technical analysis is based on three basic rules: 1. Changes in supply and demand on the stock market are reflected in stock prices, 2. Changes in stock prices are subject to trends that persist over a long period of time, 3. Processes occurring on the stock market are repeated.
In view of the above, combining both analyses, i.e. fundamental and technical analysis, can give a kind of analytical added value. Accordingly, some stock market investors use both fundamental and technical analysis.
In view of the above, I address the following question to the esteemed community of scientists and researchers:
On what premises, model assumptions, can an effective investment strategy be designed to combine fundamental analysis and technical analysis in the analysis of stock markets or other investment assets priced in the capital markets?
What do you think about this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Warm regards,
Dariusz Prokopowicz
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An effective investment strategy that combines fundamental and technical analysis in the study of stock markets or other investment assets priced in the capital markets can be designed based on the following premises and model assumptions:
1. Market efficiency: It is assumed that the capital markets are at least partially efficient, meaning that the current price of a stock reflects all available information about the company and its financial health.
2. Long-term perspective: Both fundamental and technical analysis can be used to make short-term and long-term investment decisions. However, an effective investment strategy is likely to be based on a long-term perspective, as both fundamental and technical analysis is more accurate when looking at trends over a more extended period.
3. Valuation models: Fundamental analysis typically involves using valuation models such as the price-to-earnings ratio, the dividend discount model, or the discounted cash flow model to determine the intrinsic value of a stock. These models make certain assumptions about future growth, earnings, and dividends, which can impact the accuracy of the valuation.
4. Technical indicators: Technical analysis involves using technical indicators such as moving averages, Bollinger Bands, and the Relative Strength Index (RSI) to identify trends and make investment decisions. These indicators make certain assumptions about market behaviour, which can impact the accuracy of the signals they generate.
5. Diversification: An effective investment strategy will likely involve diversifying investments across different asset classes and industries to reduce overall risk.
6. Risk tolerance: An effective investment strategy should consider an individual’s risk tolerance and goals. For example, a more risk-averse investor may prefer a system that emphasises fundamental analysis, while a more risk-tolerant investor may prefer an approach that emphasises technical analysis.
It is important to note that these premises and model assumptions are not absolute and can be subject to change over time as market conditions change and new information becomes available. An effective investment strategy should be flexible and subject to regular review and adjustment.
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Is it appropriate for the development of financial markets and the economy that above-average profits can be made by inducing financial and/or economic crises through speculative transactions carried out with the help of derivatives made in the capital markets liberalized in recent decades?
And if NOT, how should the standards and rules of financial markets be improved, so that in this way it is not possible to deliberately cause financial and/or economic crises and escalate the development of negative economic processes?
How should the standards and rules of operation of financial markets be improved, so that the scale of deliberate triggering of financial and/or economic crises through the use of speculative transactions carried out with the help of derivatives, transactions carried out in certain capital markets, is significantly reduced?
In the past, already since the commodity crises of the 1970s, the period of the beginning of the development of various new types of derivatives, the increase in the scale of deregulation and liberalization of the operation of financial markets, the change of international monetary systems through the replacement of the Bretton Woods system with free exchange rate systems, the scale of instability in financial markets, including capital markets, currency markets, stock exchanges has increased significantly. During the global financial crisis of 2007-2009, data emerged confirming the facts of speculative activities by some investment banks, which increased the scale of development of the aforementioned crisis. Also, at the beginning of March 2020, when the World Health Organization declared the state of the global epidemic, i.e. the so-called SARS-CoV-2 (Covid-19) coronavirus pandemic, this fact also triggered a strong increase in the volatility of asset valuations in the capital markets. When new events suddenly appear that generate uncertainty, fear then financial risks, credit risks, currency risks, liquidity risks, debt risks, etc.increase, which causes an increase in volatility in financial markets. Institutions that take advantage of this kind of situation, institutions that have sensitive information, use this kind of information and, on the basis of this information, carry out insider trading in certain capital markets are an example of imperfect functioning of financial markets. Such instances of imperfect functioning of financial markets, including capital markets, should be detected and limited by institutions established for this purpose, such as the Securities Commission, the Financial Supervision Commission, the Banking Supervision Commission, etc. The functioning of financial markets should be improved, and the rules, standards and procedures of individual institutions and segments of financial markets should be perfected. When it is the so-called small, small stock market investors then it is assumed that this is a positive factor in ensuring a certain level of liquidity in the capital market. However, when transactions are carried out by large financial institutions, including banks and investment funds with the involvement of large financial resources in an amount, for example, comparable to the value of the state budget of a small country, then there are quandaries about the possibility of deliberate not only exploitation of situations of instability in financial markets, but also about possible actions that amplify or even inspire these instabilities. For example, military actions and failures of critical infrastructure installations, high-risk system infrastructure, energy sector infrastructure can be factors that cause a significant increase in asset price volatility in capital markets, including energy commodity prices on commodity exchanges and securities prices on stock exchanges. A recent example would be failures, perhaps sabotage actions carried out on pipelines filled with natural gas causes destabilization in energy commodity price markets. This causes the currencies of small economies, i.e. Poland, for example, to fall. In addition, a significant increase in interest rates on the currencies of large economies like the US and the EU increases the scale of the decline in the currency of a small, developing economy and one that is highly exposed to the energy crisis. In addition, the war in Ukraine is taking place next to Poland. In addition, large, internationally operating investment banks can take advantage of this situation to conduct profitable speculative transactions using currencies characterized by a high level of exchange rate volatility and susceptibility to certain defined influencing factors. A decline in the exchange rate of the Polish national currency PLN will cause additional difficulties in the central bank's anti-inflationary, interventionist monetary policy. The topic of the need to improve the issues of the functioning of financial markets, including the improvement of the rules, standards and procedures for the operation of individual institutions and segments of financial markets is still relevant.
In view of the above, I address the following question to the esteemed community of researchers and scientists:
How should the standards and rules of operation of financial markets be improved, so as to significantly reduce the scale of deliberately causing financial and/or economic crises and escalating the development of negative economic processes?
How should the standards and rules of financial markets be improved so that it is not possible to deliberately cause financial and/or economic crises through the use of speculative transactions carried out with the help of derivatives, transactions made in certain capital markets?
How should the functioning of financial markets be improved systemically, institutionally, organizationally and normatively so as to reduce the scale of triggering financial and/or economic crises?
What are your thoughts on this topic?
What is your opinion on this issue?
Please answer,
I invite everyone to join the discussion,
Thank you very much,
Warm regards,
Dariusz Prokopowicz
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The problem of financial and/or economic crises does not entirely rest on derivatives made in the capital markets liberalized in recent decades but on ethics. So, to improve the functioning of the financial markets to reduce the scale of triggering financial and/or economic crises, a set of ethical standards must be part of derivatives.
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I am analysing a data set of trader transactions and would like to apply the methodology found in the paper by Fishe and Smith (2012). The main problem I am having is understanding the difference between trading profits and position profits. I have read the article several times but I can't quite wrap my head around the two definitions.
I would really appreciate a simple numerical example showing how to calculate both profit terms, and subsequently how to define the measures of success for both overnight and intraday informed traders.
Thank you for your help.
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https://alpari.com/en/faq/trading_terms/calculating_profits_and_losses/
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Hi frds,
As research proves the long-term damages of a Covid infection, I am seriously wondering why so few wear a mask deliberately in the Renaissance Societies?
Even as health authorities advise wearing a mask in indoor settings, very few do it. One-way ledger sharing is all over the place. Why?
Put up a Menti under the following link:
The voting code 8813 3081 is valid now and expires in 7 days.
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Stupidity. Boundless stupidity.
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We are conducting a research in the field of Behavioral Finance where some of the papers that we consulted have used the Kruskal-Wallis test for testing mean differences among groups. However we are not sure about the reason to use this non-parametric test.
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Thank you very much.
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Convention finance assumes investors are rational. However, investors are assumed to be normal in behavioral finance.
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Both theories assume investors are normally distributed across the markets, whether convention finance or behavioural finance. However, as @prof., Hans-Georg Petersen indicated a distinction is made to differentiate between rational investors, who care about the risk and expected return of their investments, usually called fundamentalists and irrational investors, also called technical investors.
In the 1980s and 1990s, most scientific papers heavily discussed the results of rational and irrational investors or noise traders across financial markets as two groups of competing traders. A good example is (De Long, Shleifer, Summers, & Waldmann, 1990). In the past several years, researchers have divided market participants into fundamentalist, rational, and irrational investors. A good example is (Brock & Hommes, 1997).
However, the conclusion of all scientific papers till today rests on how irrational traders destabilized the market and how rational investors cannot compete against them.
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Greetings everyone! could anyone kindly tell me where I can get data concerning the stock and bonds market?
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Yahoo. Finance, . Blomberg.
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Hi frds,
would like to learn more, about why intellectual elites outside the realm of politics do not wear basic PPE during a pandemic in venues like conferences in the Renaissance Societies?
Detect the same issue among extremely bright chess players in tournaments.
Which mix is it and is it a market failure?
-Out of the ivory tower, the only way of communication?
-Herding, Anchoring?
-Myopia?
-Socializing idiosyncratic risk profiles?
-Caught in a nondynamic web of reciprocity?
-Something totally different?
Cherish your feedback.
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Keteladanan elit politik dalam konteks keselarasan menuju harmoni dan saling menguntungkan
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Will green cryptocurrencies be created with which new, pro-environmental and pro-climate, green economic ventures will be financed?
Is this a purely futurological vision or is it already feasible?
Green cryptocurrencies should be developed according to new eco-innovative technologies, so that their creation, digging will use much less electricity than today. Currently, digging cryptocurrencies still uses as much energy as a medium-sized country on a global scale. The issue of saving electricity consumption is particularly relevant in the context of the current energy crisis and, in the future, also in the context of a multi-year developing climate crisis. Therefore, green cryptocurrencies, which will be used to finance new pro-environmental and pro-climate green business ventures, should also be created using many times less electricity than at present in order to be green in themselves.
In what direction will the development of green cryptocurrencies develop? Will green cryptocurrencies be used to finance new pro-environmental and pro-climate green business ventures or will green cryptocurrencies be cryptocurrencies that are mined using significantly less electricity than at present?
Or perhaps both? This would be best for the environment, the climate and the planet's biosphere.
In view of the above, I address the following questions to the esteemed community of researchers and scientists:
Will green cryptocurrencies be created with which to finance new environmentally and climate-friendly green economic ventures?
What do you think about this topic?
What is your opinion on this subject?
Please respond,
I invite you all to discuss,
Thank you very much,
Best regards,
Dariusz Prokopowicz
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Energy Web, Alliance for Innovative Regulation, RMI, and the World Economic Forum convene various activities in support of the Crypto Climate Accord (CCA). Inspired by the Paris Climate Agreement, the CCA is a private sector-led initiative for the entire crypto community focused on decarbonizing the cryptocurrency and blockchain industry in record time.
—————————-—
The crypto industry has a unique opportunity
to reduce emissions, showcase industry-wide decarbonization, create new demand for clean technologies, and increase access to customers and capital with interests in sustainability. However, to achieve these goals, any actor in the crypto industry will need a comprehensive way to measure, track, and report their electricity use and the associated GHG emissions. The crypto industry also will need guidance around the pathways and mechanisms available to achieve 100% decarbonization.
——————
The BMC revealed that it successfully collected sustainable energy information from over 32 percent of the current global Bitcoin network in its first ever voluntary survey. The results of this survey show that the members of the BMC and participants in the survey are currently utilizing electricity with a 67% sustainable power mix. Based on this data it is estimated that the global mining industry’s sustainable electricity mix had grown to approximately 56 percent, during Q2 2021, making it one of the most sustainable industries globally.
————————-—
Let's create a new standard.
We believe that it is time for a new way of doing business. The guiding principles of the future economy are sustainability, traceability, and transparency. Our ESG ratings take this new value system into account and promote the development of sustainable crypto solutions.
——————————
Conclusion:
Eco-cryptos, which represent a clean energy index, will surely emerge as a digital currency tool for eco-logical business ventures.
————-—
Ref/
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Hi All,
I am considering a PhD in Finance and would like suggestions on a research proposal ( Behavioural finance and investing).
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Perhaps you need to read the following articles first. (Grossman, 1976), (Black, 1986), (Hellwig, 1980), (Grossman & Stiglitz, 1980), (De Long, Shleifer, Summers, & Waldmann, 1990), (Brock & Hommes, 1997), (Brock, & Hommes, 1998), and (Hommes, 2021). These articles are the most influential in the behavioural economics literature.
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If books are not available in mental accounting specifically, please share books on behavioural finance which includes the same.
Thank you
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Sorry outside of my field
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Hello everyone, dear professors and students
"The impact of behavioral biases on investment decisions in the stock exchange: The moderating role of investor personality".
I hope that those who have research background and expertise in this field will help me to do this research as well as possible.
Thanks...
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I can help you out, kindly connect with me.
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More to behavioural biases
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How compensation/salary.reward or "money" is a driving factor to influence taking up risks by individuals(Astronaut/MMM Boxer) in their jobs.
How money could be an influencer in breaking relationships: An exploratory study
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In pursuit to test the theories of behavioural finance in respect of mutual fund investors, I am conducting the survey for a Research Paper entitled ‘Structural Equation (SEM) Approach to Financial Behaviour through Financial Literacy and Financial Attitude’. Kindly spend a few minutes to respond. The information will be used for academic purposes only.
Please click the following link to respond, it would take only five minutes. Thanks and regards.
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Unfortunately the questionnaire needs re-design. For instance, the questions about mutual funds are obligatory but in my case I do not have mutual funds so cannot answer those questions hence cannot proceed beyond step one. Other aspects of the questionnaire also need re-design.
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I am interested in doing research in the field of behavioural finance. But I am unable to select cogntive biases that are the base for the research.
Kindly help
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I concur with the above suggestion by Shay. Furthermore, you can check Edwards, W. (1968). Conservatism in human information processing; and De Bondt, W. F. M., And Thaler, R. (1985). Does the stock market overreact?. In these articles, the authors have discussed the details of conservatism; underreaction, and overreaction to market movement respectively, which are also relevant concepts under cognitive biases.
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My research is related to behavioral finance factors of working women in service industry.. Please suggest me the sampling method for my study. I have a confusion whether it could be purposive sampling or disproportionate stratified random sampling or other.....
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Probability sampling procedures are bound to be very expensive to use. Non-probability sampling procedures are going to be less expensive. Convenience sampling, quota sampling or any other could offer more practicable possibilities.
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My area of interest is technology adoption among a certain group of people , what methodologies/framework/design could be applicable for my Ph.D thesis? Kindly enlighten by sharing few books or research thesis.
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Behavioral Finance is amongst recent involvements in Finance science. It depends on the assumption that peoples have several biases that affect their final decision. Therefore, do you think that such an approach could develop into a stand-alone field in Finance?
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In my opinion, behavioral finance will continue to be a developing area of ​​finance in the future. Behavioral finance related to consumer purchases in the future will be determined by the continuation of the development of online payments and settlements, the development of electronic commerce on the Internet, e-commerce, e-logistics, payments made with the use of cryptocurrencies, the possible impact of subsequent waves of the SARS-CoV-2 coronavirus pandemic ( Covid-19) on consumers 'purchasing decisions, the impact of the increase in pro-environmental awareness of citizens on changes in citizens' purchasing preferences, etc. However, in the field of behavioral finance related to investments made in financial markets, including money and capital markets, an important factor may be the development of computerized transaction systems, which are used by financial institutions, including banks and investment funds, for semi-automated transactions in capital markets, e.g. securities markets according to specific criteria.
Happy New Year 2022,
Be safe and healthy,
Best wishes,
Dariusz
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I propose the following research topics in the field of behavioral finance operating on securities markets:
Analysis of the correlation of changes in the market valuation of securities on the stock exchange with the economic and financial situation of the issuer's company and external factors such as:
- changes in interest rates of central banking and commercial investment instruments offered by banks,
- changes in the level of income of individual stock investors,
- business cycle in the economy and in the sector in which the company operates, issuer of securities,
- increase in the importance of technical analysis in the face of fundamental analysis in a situation when the share of stock exchange investors using computer programs used for technical analysis increases,
- increase in the importance of stock exchange transactions concluded by computerized transaction systems working on behalf of investment banks, including transactions that last for a short period of time, sometimes a few seconds or part of a second, but for large amounts of funds,
- securities and brokerage houses run by the stock exchange and individual issuers, advertising and image campaigns on the occasion of the public offering of a new issue of acacia or corporate bonds or in other situations,
- change of the state's economic policy, change of the tax system regarding investment in securities, eg by introducing or reducing tax on capital income,
- change in the ratio of investors from foreign exchange investors to domestic investors in connection with the activities of international rating agencies, funds and investment banks.
In view of the above, what other interesting research topics do you offer in the field of behavioral finance operating on securities markets?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
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Dear Vivek Pandey,
Thanks for your suggestions for research topics in the field of behavioral finance. The topics are interesting and developmental. In terms of the behavioral consequences of blockchain integration in financial transactions, interesting research can be carried out on improving the security of transactions.
Thank you very much,
Best wishes,
Dariusz Prokopowicz
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Money provides a certain level of living in consumption and existential terms.
Money allows you to undertake investment projects, organize business operations.
However, not everything can be bought with money. However, money does not ensure happiness, not everything can be bought.
For example, true, good friendship and love, and other feelings and higher values can not be bought.
In view of the above, the current question is: Can everything be bought for money?
Please, answer, comments. I invite you to the discussion.
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Can you buy the time?
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In my current research, I'm trying to describe the thinking of the people during the financial crack of 1929 in the united states, mainly in the times where the stock market bubble began its gestation.
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I think the following book will help you out in this regard:
The normal personality: A new way of thinking about people.
S Reiss - 2008 - psycnet.apa.org
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Any source of getting financial data (Balance sheet) of listed companies on bursa Malaysia?
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Many website or listed company website search it
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Being an academic of finance and accounting subjects, I always look for new and contemporary ideas, thoughts, research, methods, models, processes involved with the research in the broad area of finance and accounting. once I found a website containing researches in the last 10 years, but unfortunately I lost it in the bookmarks.
Can we share the sources for getting such resources for learning and enrichment of knowledge in Finance and Accounting?
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AI on Accounting
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I am considering a PhD in behavioural finance or Blockchain , I need help on topics for a PhD proposal.
Any ideas on interesting subjects?
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Cryptocurrency Market:
Artificial Intelligence for Behavioral Finance
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Celebrity endorsements are common across lifestyle products even basic things as groceries are being endorsed by celebrities, but when it comes to investing does endorsement of a mutual fund scheme or a broking service or an insurance product by a celebrity (specifically from sports, music or cinema) change the investors /buyers behavior towards such product. Does celebrity endorsements have relevance when it comes to personal financial planning.
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Adding to all the previous answers, it may also depend on the brand image and personality of the celebrity. Some of them have trust engraved with their image, like Big B, Dhoni etc. If these kind of celebrities can sell real estate projects which is also considered as an investment. Then why not other forms of investment.
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I'm doing a work on behavioural finance and i put my attention on the volatility, i find many work for calculate volatility with behavioural model , now i'm looking for a way to calculate it on R software .
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Hi researchers, with all due respect, can you share your valuable insights, suggestions and research (if any)?
Recently, I heard on a news from China that it is very difficult to get your money back from people whose mobile phone batteries are on average lower than 20%. In this regard, I want to pursue research to check what relationship can be found between mobile phone usage pattern and investment in the share market.
My MBA thesis was on the title "The behavioural factors that create herd behaviour in the share market."
Your valuable suggestion will be highly appreciated. Thanks in advance.
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Interesting topic, All the best
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I am working on portfolio optimization using lower partial moment of order 1, can someone help me how to implement LPM-1 in excel sheet using "tau" as my threshold value as 0.00% and order (n) as 1.
Thank you all in advance for your contributions to my question.
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Will the share of transactions made with traditional money issued by central banks decline successively due to the development of cryptocurrencies? What are the consequences of this process in a country with large and growing public debt?
More and more large companies are announcing the creation of their own cryptocurrency. Some investment banks, such as JP Morgan, have announced the creation of their own cryptocurrency for settlements with key contractors. Some technology companies operating in the field of ICT and new online media also plan to develop blockchain technology in cryptocurrency applications. For example, the social media portal Facebook also announced the creation of its own criticism called Libra, which the users of the portal will be able to pay for various services available through Facebook. Some investment funds invest their financial capital in some cryptocurrencies.
Whether in the context of the development of cryptocurrencies, the share of transactions made with traditional money issued by central banks will gradually decrease. Will the development of cryptocurrencies and their rapid dissemination not jeopardize the stability of the monetary systems of some countries? If the share of traditional money in total transactions made by citizens will decrease, will the significance of the financial system, including the banking system, also decrease? If there is a large unpaid public debt in a given country and a decrease in the use of traditional money in transactions between entities, can it lead to a serious financial and / or currency crisis? Many countries finance their public finance debt by issuing Treasury bonds in which foreign financial institutions also invest. So, can future cryptocurrencies be used for international settlements in the future? Can the decrease of confidence in the national currency of a heavily indebted country lead to an increase in international settlements using cryptocurrencies?
Do you agree with me on the above matter?
In the context of the above issues, I am asking you the following question:
Will the share of transactions made with traditional money issued by central banks decline successively due to the development of cryptocurrencies? What are the consequences of this process in a country with large and growing public debt?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
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It’s difficult to answer this question with complete confidence. Perhaps a middle ground needs to be reached; banks need to do more to understand and accommodate the blockchain technology behind cryptocurrency, and the creators of new cryptocurrencies need to consider and appreciate the importance of traditional banking practices. Cryptocurrencies developed on blockchain platforms could prove to be perfectly suitable for the digital age. It is an alternative that is fundamentally different from the existing financial world and it does have the potential to prevail over traditional money.
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I am considering a PhD in behavioural finance, I need help on hot topics that can be studied under behavioural finance for a PhD proposal
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We know that with Basel all banks adopt a rating system to evaluate their loans and to calculate their regulatory capital. companies have always had problems with the rating calculated by banks and now with COVID-19 what will happen?
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It's been 9 months since my last comment. Since then, the sale of loans in banks has decreased. The SARS-CoV-2 (Covid-19) coronavirus pandemic has caused an economic recession, a decline in investment and a decline in demand for economic loans. In addition, the anti-crisis public financial aid addressed to enterprises resulted in an excess of money that did not generate additional investments. Even the lowered interest rates did not help to generate a significant increase in the economic activity of enterprises.
Regards,
Dariusz Prokopowicz
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Hi everyone! I would like to write my bachelor's thesis on a topic that's currently relevant in the sphere of finance, marketing or computer science (or if it's possible a topic concerning all the three fields of interest). Those fields are the same upon which my bachelor is based (Bachelor of Science in Economics, Management and Computer Science).
I've some broad ideas about the topics, for example: the link between brand equity and financial performance; the effects of aggressive marketing on financial markets; the new generation of traders (covid has increase the number of retail investors with no previous experience); machine learning applied to behavioral finance (I really enjoy those last two topics but have no idea on how to connect them).
Obviously any kind of suggestions, regarding new topic (broad or specific) or the development of cited ones would be greatly appreciated.
Thank you in advance!
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A good answer would be: Digital currencies and digital payment - an IT challenge for safe transactions.
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Has the scale and instances of dissonance increased since the 1970s, and the disparity between the macroeconomic situation and the economic situation of a particular national or global economy, including economic growth, etc., and the situation on capital markets, including securities markets?
The above discussion inspired me to the following considerations: Well, since the development of the deregulation process, the increase in the globalization of financial markets, the introduction to the financial markets of many derivatives without full supervision by financial supervision institutions, i.e. since the 1970s the frequency has increased and the scale of emerging financial and economic crises in various parts of the world. At the same time, perhaps the business cycles are increasingly influenced by the monetary policy of central banks and fiscal policies of governments mainly of the world's largest economies. The result may be a growing discrepancy, a growing disproportion between the macroeconomic situation and the situation of a particular national economy or global economy, including economic growth, etc., and the situation on capital markets, including securities markets.
What do you think about this topic?
What is your opinion on this topic?
Do you agree with me on the above matter?
In the context of the above issues, I am asking you the following question:
Has the scale and instances of dissonance increased since the 1970s, and the disparity between the macroeconomic situation and the economic situation of a particular national or global economy, including economic growth, etc., and the situation on capital markets, including securities markets?
Please reply
I invite you to discussion
Thank you very much
Best wishes
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Thank you for your detailed analysis.
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Does the global financial crisis of 2008 still have significant importance on capital markets attributed to behavioral psychology of the behavior of investors operating in these markets?
Are the determinants of behavioral investors' factors still strong in recent years on the largest stock exchanges in the world, including the importance of financial market psychology in interpreting changes in stock exchange trends in these markets?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
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The sharp economic downturn and turmoil in the financial markets, commonly referred to as the “global financial crisis,” has spawned an impressive outpouring of blame. The efficient market hypothesis (EMH)—the idea that competitive financial markets exploit all available information when setting security prices—has been singled out for particular attention. Like all successful theories, the EMH has major limitations, even as it continues to provide the foundation for not only past accomplishment, but future advances in the field of finance.
Despite the theory's undoubted limitations, the claim that it is responsible for the current worldwide crisis seems wildly exaggerated. This essay shows the misreading of the theory and logical inconsistencies involved in popular arguments that EMH played a significant role in (1) the formation of the real estate and stock market bubbles, (2) investment practitioners' miscalculation of risks, and (3) the failure of regulators to recognize the bubbles and avert the crisis. At the same time, the author argues that the collapse of Lehman Brothers and other large financial institutions, far from resulting from excessive faith in efficient markets, reflects a failure to heed the lessons of efficient markets. In the author's words, “To me, Lehman's demise conclusively demonstrates that, in a competitive capital market, if you take massive risky positions financed with extraordinary leverage, you are bound to lose big one day—no matter how large and venerable you are.”
Finally, behavioral finance, widely considered as challenging and even supplanting efficient markets theory, is viewed in this article as complementing if not reinforcing efficient markets theory. As the author says, “it takes a theory to beat a theory.” Behavioralism, for all its important contributions to finance literature, is described as not a theory but rather “a collection of ideas and results”— one that depends for its existence on the theory of efficient markets.... Ball, R. (2009). The global financial crisis and the efficient market hypothesis: what have we learned?. Journal of Applied Corporate Finance, 21(4), 8-16.
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The study of the functioning of securities markets is particularly important in the context of the analysis of the effective functioning of modern economies. It is particularly important to limit the systemic investment risk and strengthen the instruments of financial supervisors to reduce the likelihood of further global financial crises.
In view of the above, I would like to ask you: Analysis of the functioning of securities markets?
Please, answer, comments. I invite you to the discussion
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Dear Hazim Al Dilaimy, Aa Ss, Er Sir Dr Soumitra Kumar Mallick, Thank you very much for participating in this discussion. Thank you for the proposed interesting issues in the field Analysis of the functioning of securities markets?
Thank you very much for the sent suggestions of interesting topics, research issues, etc. related to this issue.
Thank you very much and best regards, Have a nice day,
Dariusz Prokopowicz
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I intend to examine the impact of a variable (X) on another variable (Y) taking in panel data. I am stuck in right there and cannot make out which method would work best.
Looking for a suggestion.
Regards
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Hi
Based on the various properties of the data you have in terms number of years (T) and cross-section (N), you can go for FIXED EFFECT, RANDOM EFFECT, GMM, POOLED OLS, PANEL ARDL, PANEL FMOLS, POOLED MEAN GROUP ETC.
YOU CAN READ AND GET MORE INFORMATION ON THESE FROM ANY GOOD ECONOMETRIC TEXT BOOK, ESPECIALLY THOSE ON PANEL.
THANK YOU
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We are looking at a pandemic that will have consequences both in the short and medium and long term. In particular, we need to understand the reaction of financial markets to an event that affects the whole world and not individual countries, as has happened in past years.
📷
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One of the consequences of Covid-19 is the lockdown effect on the economy. This will hit earnings and output of goods and services. Then there is also the liquidity aspect where market rebounds on liquidity provided by Govt to counter the lockdown effects. End result is volatility. Markets are not stable. The initial violent reaction could be a worst case scenario with current intermittent rebound not sustainable. A vaccine is the panacea that will provide a basis for a sustainable market rebound.
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How behavioral economics can be used to study investor behavior in capital markets, including securities markets?
How is it that in these markets every several or a dozen or so years, there is a high re-evaluation of the valuation of financial instruments, assets, including company shares? What is the issue of the effect of the sheep's rush, which to some extent is often inspired by the appropriately constructed, liberalized offer of products and services of financial institutions?
Besides, how does it fit into the issue of the cyclical nature of economic processes, ie the volatility of economic growth of entire national economies in the long-term perspective? In addition, the issue of the various state intervention instruments applied by national governments is also important, some of which also act on consumer behavior of small investors and shareholders.
Considering anti-crisis, counter-cyclical, interventionist monetary policies based on low interest rates and central banks buying programs for assets lost from commercial banks, it is reasonable to study the potentially high level of state intervention in the financial markets. In connection with the liberalization of the functioning of capital markets and increasingly emerging financial crises since the 1970s, the scale of active interventionist monetary policy of central banking is growing, but also in relation to capital markets, including securities markets. Therefore, deregulated and indirectly subjected to potential anticyclical state intervention, capital markets, including securities markets, are increasingly losing balance, falling into extreme market re-evaluation and undervaluation of valuations of securities, and consequently growing systemic investment, credit, etc. risks and increasingly emerging financial crises.
In view of the above, I would like to ask you: Behavioral economics and interventionist monetary policy and the cyclically changing situation in the securities markets?
Please, answer, comments. I invite you to the discussion
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Dariusz Prokopowicz initially, the new financial theory suggested that investors psychology have the great impact on securities prices. Investors biases and behavioral pricing models focus on how to deal with such matters in real world. Therefore, we can be conclude that future works could be take in consideration the role of behavioral economics.
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This is for the purpose of testing whether Sri Lankan equity investors exhibit herding behavior.
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Asymmetry is a usual term in Corporate Finance but the operational proxies seems not very fit to capture the real life effect.
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Hello team: I wish to measure information asymmetry in credit/Lending market and looking of best variables. Specifically, I wish to find measurements for this variables ; borrowers-lenders information asymmetry, shareholders -managers information asymmetry, creditors -regulators information asymmetry and regulator-bank information asymmetry.
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There is a really strange phenomenon in Chinese stock markets. When the regulation institution decides to get some new companies listed (it is noteworthy that IPO has to get permission from Securities Regulatory Commission in China), the stock market drastic falls and the Chinese investors sell out their stocks crazily.
Some argue that more stocks listed means that more money is needed by the market, but the supply is constant in the short term. So the stock price falls. But I don't think it explains well what we observe.
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This is an interesting phenomenon. I hope by now (2020), the situation has much improved.
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integrity mean markets are unimpaired, uncorrupted, sound, impartial and equitable. it is related to market design.  
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thanks a lot for valuable information @ Shian-Loong
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The Prospect Theory (Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263-291) defines a "value function". I want to know if there is a way to estimate that curve based on answers of the questionnaires (prospects).
In the cumulative prospect theory they estimate some parameters but I didn't understand how (Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and uncertainty, 5(4), 297-323.).
Can anyone could make a more simple explanation for me?
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Thanks professor Paul Louangrath , but I still don't know how to formulate this regression using logistic function because we don't have explicit values of X and Y. For a given prospect ("choice") we have two alternatives, each one with a pair expected value/probability.
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What are the possibilities of incorporating BEHAVIOURAL FINANCE to the existing stream of studies that already gave a clear base to the subject for Phd?
What are the possibilities of looking at various energy sources in automobile industry in sucha manner using behavioural finance?
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You can study the impact of behavioral finance on the financial performance of food industry.
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The basic idea for any chance of infusion of thermoeconomics into behavioural aspects of finance is my proposed multidisciplinary research area. Impact of the various production techniques and its rippling effect on the mindset is what i am trying to go forward with.
is it a worthy topic?
is it a beneficial area that can impact the growth?
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What do you think are the most important sources of financial and economic crises?
Which sources contributed to the generation of financial and economic crises in the past?
What do you think sources of future economic crises will dominate in the future? What kind of economic crises will dominate in the 21st century?
Please, answer, comments.
I invite you to the discussion.
Dear Friends and Colleagues of RG
The issues of risk management in the context of determinants of the global financial crisis, globalization processes, technological progress and other factors I described in the publications:
I invite you to discussion and cooperation.
Best wishes
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The greedy nature of financial managers and political corruption
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Hi, I'm working on my dissertation in behavioral finance, I am open for the discussion regarding the wives financial strategic in risk of divorce possibility?
is there any other factors that might affecting the decision making process?
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Sure.
Man and society can not adjust the development of life as they wish.
Life is becoming stronger than everyone else
Relationships are governed by interests and most important marital life.
When interests are balanced, feelings, stability and having children come.
In Europe, when a man is fired, his wife divorces him. Therefore, there are cases of suicide when the loss of work because the man has become his life and stability and his children are in danger.
Because the wife will go with another person financially stable and leave her husband and children. This is an existing case but it may not be general.
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suggest me most trending topics in behavioral finance in 2019.
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Acknowledged.
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Hi, I do research in behavioural economics in Cameroon. I would like to involve a psychological analysis in my work by studying the influence of the state of mind of the borrowers on their probability to repay their debts. In economics, we call this moral hazard (the risk that borrowers will refuse to pay back debt). I find it difficult to find and choose the right literature in psychology. It is the same for experimental methods in psychology: how to model a psychological experiment in psychology? You will be of great help to me if you can send me some pre-eminent works in psychology or direct me to authors and theories of the field. Tks
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Hi Dany,
You may find theses helpful:
The Dishonesty of Honest People: A Theory of Self-Concept Maintenance (2008)
Predicting dishonest actions using the theory of planned behavior (1991)
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Hi all, i'm trying to understand Fama - Macbeth two step regression. I have 10 portfolios and T=5 years. In the first step i compute 10 time series regressions and if i have 2 factors i get 20 betas. How many regression i have to compute in the second step? only 5? and which betas should i use? The average of the betas found in the first step?
Thank you in advance.
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We compute Fama-MacBeth betas in this paper which is available on line.
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Hi everybody, why do we assume quadratic utility function in the classic portfolio theory?
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The absolute risk aversion function is such that quadratic utility yields increasing absolute risk aversion.
Moreover, expected utility can be defined in terms of means and variances.
In short, it is a convenient and useful simplifying assumption.
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Analysis of the economic, financial, material and housing situation of households against the background of the state's economic policy
Does anyone of you examine the correlation between the use of interventionist, active, counter-cyclical socio-economic policy of the state consisting in financial and material support for citizens and low income families and representing the middle class of the social structure and the growth of consumption and savings and, consequently, improving economic growth?
Does anyone from you research the following issues in your country:
The economic and financial, material and housing situation of households against the background of the state's economic policy?
I carried out research in this area. I received interesting results on the correlation of an active interventionist socio-economic policy and the pace of economic growth. Particularly interesting correlations occur between state intervention in the field of housing and social policy and the economic and financial, material and housing situation of households. The improvement of the economic, financial, material and housing situation of households is an exceptionally strong countercyclical factor activating economic growth. In addition, it is also a particularly important issue in developed economies in which the unfavorable demographic process of an aging population has been going on for many years. The long-term improvement of the economic, financial, material and housing situation of households, which continues in the period, translates into an increase in fertility and a slowdown in the socio-economically unfavorable process of an aging population. In my country, there are currently developed programs to improve the economic, financial, material and housing situation of households, which has been shown to be an important growth-enhancing factor, stimulating consumption and increasing savings. As a consequence, an improvement in economic growth is observed in many branches of the local and national economy.
In view of the above, the current question is: Does anyone of you examine the correlation between the use of interventionist, active, counter-cyclical socio-economic policy of the state consisting in financial and material support for citizens and low income families and representing the middle class of the social structure and the growth of consumption and savings and, consequently, improving economic growth?
Please, answer, comments.
I invite you to the discussion.
Dear Friends and Colleagues of RG
The issues of specific programs to improve the economic, financial, material and housing situation of households as key instruments of pro-development keynesian anti-crisis state intervention and significant components of the socio-economic policy of the state I described in the publications:
I invite you to discussion and cooperation.
Thank you very much
Best wishes
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Dear Friends and Colleagues of RG
The issues of specific programs to improve the economic, financial, material and housing situation of households as key instruments of pro-development keynesian anti-crisis state intervention and significant components of the socio-economic policy of the state I described in the publications:
I invite you to discussion and cooperation.
Best wishes
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Future Scope of work in Behavioral Finance.
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Thanks for Answering.
I believe the output of Technical Analysis is the derivative of instantaneous cumulative behavior of all investors and vice versa. In that sense Technical Analysis can assumed to be termed as "behavioral finance technical analysis" . Hope you would agree on this.
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I am conducting a research regarding behavioural finance, titled:
" The impact of behavioural finance in the investment decision process and alternative techniques on evaluating a company's performance."
I plan to use Multiple Linear Regression Model, using psychological biases as the independent variables (Overconfidence, Loss Aversion). But I am finding it difficult to find data and don't know what specific data to look for. Any recommendations/tips/ideas will be greatly appreciated!
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The target is to identify exactly what you want to study and what is the level of this research. You can start with ordinary regression but probably it will not contribute as much as you want. If your research question is qualitative you can adapt it to quantitative analysis though Logit-Probit models in an attempt to describe the problem and its parameters. Alternatively, and probably a more advanced aspect is to use probability models to assess qualitative parameters. Concerning the data you are looking for, you can find ordinary data that fit in your research profile. See again the first line of my answer and look for your research question.
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I want to use the GMM technique to estimate parameters of Fama Fench three factor model. I don't have stata license so how can i do with Eviews? I saw there is GMM between the methods available but i don't understand what to write in the field "instruments". Has anyone ever used Eviews to apply GMM estimation technique? Thank You in advance.
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You might try R. Tutorial here: https://www.youtube.com/watch?v=dc1L3zjsgiY
R, of course, is free.
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Hi ,
Can any one suggest an idea about "behavioral finance" . Looking for some information in the research area.
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I am student of Ph.D. my research area is behavioural finance. i want to select new emerging topics
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Hello
As @ Steven Barber rightly mentioned, that the best area to do research is your interest list item.
Secondly, I would suggest you can look into area such bank loan defaults pattern or comparison between speculative & fundamental investor Or pattern of Insurance purchasers
Thridly, follow as scientific method i.e. conduct literature review search for RESEARCH GAP i.e. unresearched area.
Hope this would help you
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I keep going back to Theranos and the russian proverb: doveryai, no proveryai. There always seems to be a rush to a new hype, whether it is digital currency, the cannabis market, or the next hot fintech, startups seem to oscillate according to market perception rather than actual value. On private equity, one would think that the market would be more stable and value oriented but time and again we have seen prominent names be revered as oracles of their times only to have them prove the market wrong in assigning them those titles (i.e.: Madoff).
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Illusions have a great significance in social life and political economy, e.g. the new economy illusion of the 1990s. Economic Analysis (a posteriori) can work out rational essentials, but economic practice is about human action, which is to a great extent guided by irrational expectations (a priori), i.e. game behavior by informed and uninformed guesses.
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I have households data and I am trying to measure their financial literacy by using education level and investment expertise as proxies.
Can anyone please link me to some theoretical evidence where these two have been used as proxies for Financial literacy.
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Thanks all, your suggestions really helped me a lot....
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How to make a strong proposal for PhD admission in Management Sciences (Finance)? Please guide me, i am striving so hard but now able to make a valuable thing yet. My interest is in Behavioral Finance, please suggest. If you have any model proposal share with me so that i can make mine. Thanks in advance.
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Read latest publications in good journals and then find gap after a comprehensive reading.
Don't be hurry, it will take time, be careful while selection of data/sources of data, mostly students face hurdles at data collection stage.
Good Luck
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Currently, I am searching for a research topic for my BSc thesis on behavioral finance. I am interested in ambiguity aversion. What topic could you advise on ambiguity which is not too deep (which fits to Bachelor level research)? Many thanks.
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In addition, I note the interesting discussion inspired me to the following considerations:
Is the situation on the stock exchange markets really correlated with the macroeconomics of the entire economy?
In the long-term period, this correlation is significant. On the other hand, however, the importance of state intervention implemented through monetary policy pursued by the central banking and through the budgetary policy pursued by the ministerial bodies appointed for this purpose within the state administration is growing. The central banks in many countries, including the Federal Reserve Bank and the European Central Bank after the outbreak of the global financial crisis in the autumn of 2008, have applied particularly significant interventionist monetary policy. I researched this issue and published scientific publications on this topic.
I invite you to the discussion
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I read many papers and came to know that so much researched work is already available... Now the question is what new can be done... Contemporary issues in Behavioral Finance is something i am looking forward for... your comment will be valuable to my study
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The answer to this is given by behavioral economics, which deals with cognitive errors affecting people's decisions.
These decisions are not always rational and because they concern many shopping situations not always needed products, so they are also of significance for the domestic or even global economy.
The global significance of these not always rational economic decisions arises when the effects of these decisions are analyzed in the context of economic globalization processes.
In addition, the results of research in the field of behavioral economics indicate that consumer preferences may change depending on the context, ie the specificity of a particular situation in which decisions are made.
In addition to the study of consumer behavior on the basis of behavioral economics, there are behaviors of, for example, investors on capital markets who also often do not have full information about the issuer of securities buy or sell shares, bonds and other instruments listed on securities markets under the influence of partly emotions and not just rationally made decisions.
Emotion, which often accompanies decision making about purchasing or selling securities, may have positive acceptance of high risk levels in good times in different markets and as a result of the so-called "sheep's rush", which boils down to buying, because it was previously bought by a friend and neighbor, and earned it.
There may also be irrational decisions on the sale of securities in a situation where it later turns out to be a short-term panic on the capital market.
In the light of the above examples, irrational economic decisions made by citizens and economic entities often conditioned by the psychological factor of positive or negative emotions are more and more numerous.
This raises the question why more and more in recent years we will be able to provide these examples confirming the validity of the development of research in the field of behavioral economics.
Is it because in recent years more and more economists are growing up and seeing research in the field of behavioral economics?
Or rather because in the deregulated financial markets market instability situations are more frequent, markets tend to lose their market equilibrium, financial crises occur more frequently, and the scale of undervaluation and the more revalue of market valuations of certain assets can be more and more pronounced on stock exchanges.
Analogously, the impact of more and more effective advertising campaigns on consumers, advertising campaigns also conducted on social media websites can increase the importance of occasional emotions in the context of decisions to buy specific products or services.
In view of the above, the current question is: Do consumers always make rational consumer decisions when purchasing economic goods?
Please, answer, comments. I invite you to the discussion.
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Has the upgraded computerized Business Intelligence analytical platforms been implemented in the credit risk management systems of financial institutions?
Please reply.
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I follow answers
best regards
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The evolution of world economy is strongly conditioned by the financial system, and specially by the behaviour of the numerous and diverse financial markets (stocks, money market, forex, interbank, bonds, derivatives, commodities, etc.). For this reason, financial variables determine consumption, investment, foreign trade and public spending.
I propose this question, in which I would like to know if you agree or consider open some additional points of view of the economy that may condition new economic crises. Thank you.
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I agree with Carmelo Ferlito note, that I suppose is quite near to the Schumpeterian analysis you may find in Business Cycles: the structural economic dynamics is always at the beginning of a major financial crisis. In a certain sense it is also at the beginning of the 2008 financial crisis, that - IMHO - cannot be understood without considering the ICT technological revolutions in the '90s which have addressed increasing amount of liquidity in financial markets.
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what proxy can i use to measure institutional investor behaviour?
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I think survey is a powerful tool to address this issue. I have used it, for example, in:
Przychodzen, J., F. Gómez-Bezares, W. Przychodzen and M. Larreina (2016): "ESG issues among fund managers-factors and motives", Sustainability, vol. 8, nº 10: 1078, pp. 1-19. Open access: http://www.mdpi.com/2071-1050/8/10/1078
Gómez-Bezares, F. and W. Przychodzen (2018): “Bank-affiliated mutual fund managers’ trading patterns of parent banks’ stocks: international evidence”, Journal of behavioral finance, vol. 19, nº 2, pp. 199-208.
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I am currently working on my dissertation my question is "which group of individuals are more susceptible to nudge" and its almost impossible to start a questioners to the lack of time, where can I find data that I can use for research purposes?
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Dear Research Scholars Am doing my Research on Management.... topic related to behavioral finance/ marketing. Do let me know where can i get my research paper published free of cost
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I recommend Ekonomski vjesnik/ Econviews, a journal of my Faculty of Economics. We are always interested in publishing good articles.
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