Behavioral Finance September 2021
Name: ____________________________________
ESSAYS:
- 1)In a paragraph, outline the central messages of Shiller’s chapter entitled “The Stock Market in Historical Perspective.”
- 2)In a paragraph, outline the central messages of Schiller’s chapter entitled “The Real Estate Market in Historical Perspective.”
- 3)In a paragraph, explain the two methods of calculating momentum? From which BF bias or heuristic(s) does momentum arise.
- 4)Explain the layering rationale of Wall (1995) with respect to individual portfolios goals, and tolerance. Comment on the three general layers and their link to mean variant portfolio construction (i.e., does it support or contradict).
- 5)A manager outperforms. In a paragraph, explain the numbers example (specifically, a universe of 1 vs. 100 vs. 1000) with respect to the argument of that manager’s luck or skill. Separately, explain the numbers example with respect to a hedge fund manager’s luck or skill (i.e., is it the same or different).
- 6)Explain the findings of the tests of the fixed income expectations hypothesis. Discuss the test results with respect to short rates, long rates, curve steepness, and inflation.
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