Behavioural finance

University / Undergraduate
Modified: 17th Sep 2020
Wordcount: 189 words

Disclaimer: This is an example of a student written assignment. Click here for sample essays written by our professional writers.
Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of

Cite This


What is behavioural finance?


Behavioural finance is a field which seeks to explain why people make irrational financial decisions, which often results in people making decisions that go against their best interest. Behavioural finance goes against the conventional methods of finance such as the capital asset pricing model and the efficient market hypothesis. The conventional methods of finance are logically based, as well as being good at predicting and explaining certain events. More specifically, they assume that investors are rational, as such conventional methods of finance do not explain how people behave in the real world and also overlook the possibility for emotions and psychology to influence investors’ financial decisions. On the other hand, behavioural finance explains how people behave irrationally or without having a logical reason. As a result, behavioural finance takes into account behavioural and cognitive psychology theory along with conventional economics and finance when explaining why people make illogical financial decisions.



Cite This Work

To export a reference to this article please select a referencing style below:

Give Yourself The Academic Edge Today

  • On-time delivery or your money back
  • A fully qualified writer in your subject
  • In-depth proofreading by our Quality Control Team
  • 100% confidentiality, the work is never re-sold or published
  • Standard 7-day amendment period
  • A paper written to the standard ordered
  • A detailed plagiarism report
  • A comprehensive quality report
Discover more about our
Assignment Writing Service

Essay Writing


Approximate costs for Undergraduate 2:2

1000 words

7 day delivery

Order An Essay Today

Delivered on-time or your money back logo

1826 reviews

Get Academic Help Today!

Encrypted with a 256-bit secure payment provider