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Evolutions and Challenges of Behavioral Finance

Journal: International Journal of Science and Research (IJSR) (Vol.4, No. 3)

Publication Date:

Authors : ; ;

Page : 1055-1059

Keywords : behavioral finance; classical finance; market efficiency; investment decision; psychological factors; market anomalies;

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Abstract

This article presents the evolution of behavioral finance, which is a new approach in capital market. This study reveals the effect of psychological factors in investment decision making process, which was a strong contradiction to the Efficient Market Hypothesis. Behavioral finance is not a replacement to the classical finance paradigm, but an alternative solution to explain the market inefficiency and the irrational behavior of investor.

Last modified: 2021-06-30 21:34:49