Document Preview: 

Behavioural Finance and the Psychology of Investment – Assessment 2013-2014

Contact details

Arief Daynes: tel. 02392 844182, extn. 4182, email Arief.daynes@port.ac.uk

David Latimer: tel. 02392 844013, extn. 4013, email David.Latimer@port.ac.uk

Paraskevas Pagas: tel. 02392 844721, extn. 4721, email paraskevas.pagas@port.ac.uk

Assignment

The assignment is a written, individual assignment worth 40% of the total grade for the unit. You are asked to write a 2,000 word essay on the following.

The requirements of the assignment are important. Please read the following carefully.

The UK insurance industry currently has the following life-expectancy forecasts for people in their early 20s: Men, 82 years; Women, 84 years; at least one partner of a couple, 86 years. Thus, most people on the Behavioural Finance unit have lifetime investment horizons of over 60 years. This is what we mean by the very long term.

For the very long term investor there is something special about the stock market. There are strong arguments and evidence that say that the stock market is the best asset class for the very long term investor. This means that for your very long term future you should be investing in the stock market. So even if your future career has nothing to do with the stock market, you still have to know how the stock market works.

Assignment requirement: Write a 2,000 word essay. In the course of your essay you must answer the following questions (not necessarily in the same order in which they are given):

(1) Explain why the stock market is regarded as the best asset class for the very long term investor.
(2) What is the difference between passive investing and active investing?
(3) If you believe in modern finance and the EMH you will be a passive investor. If you believe that behavioural finance can be applied to very long term stock market investing you will be an active investor. Explain why?

Watch the video and share your opinions and reasons on what disorder this is.

Also find another media example (e.g. movie, video clip, news article) that covers either a somatoform disorder or dissociative disorder. Please remember to give your rationalof the disorder you assign to your example.Document Preview: 

Conceptual models of conversion disorder.

Psychodynamic and learning theory offer conceptual models of conversion disorder that emphasize the role of conversion symptoms leading to escape or relief from anxiety. Cognitive Theory Cognitive theorists have speculated that some cases of hypochondriasis may represent a type of self-handicapping strategy, a way of blaming poor performance on failing health (Smith, Snyder, & Perkins, 1983). Cognitive theorists speculate that hypochondriasis and panic disorder, which often occur together, may share a common cause: a distorted way of thinking that leads the person to misinterpret minor changes in bodily sensations as signs of pending catastrophe (Salkovskis & Clark, 1993) * Somatoform Disorders Treatments include Antidepressant medications Cognitive-behavioral treatment focused on exposure and response prevention Dissociative Disorders Dissociative disorder – A disorder characterized by disruption, or dissociation, of identity, memory, or consciousness. The major dissociative disorders include dissociative identity disorder, dissociative amnesia, dissociative fugue, and depersonalization disorder. In each case, there is a disruption or dissociation ( “ splitting off ” ) of the functions of identity, memory, or consciousness that normally make us whole. * Dissociative Disorders The dissociative disorders are a group of conditions involving disruptions in a person ’ s normally integrated functions of consciousness memory identity perception Overview of Dissociative Disorders * Dissociative Disorders In derealization one ’ s sense of the reality of the outside world is temporarily lost In depersonalization one ’ s sense of one ’ s self and one ’ s reality is temporarily lost Depersonalization Disorder Depersonalization – Feelings of unreality or detachment from one ’ s self or one ’ s body.