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A Look at Behavioral Finance

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  • Mohamed S. Ahmed

Abstract

Behavioral theory in finance ties finance theory and practice to human behavior. This paper aims at reviewing behavioral finance principles, concepts and theories. This paper starts with the shift from EMH/CAPM paradigm to behavioral finance. Then, the paper goes through the financial anomalies including the size effect, value effects, momentum effects, weekend effect and turn-of-the year effect. Finally, the paper addresses the key pillars of behavioral finance by explaining the limits to arbitrage and the main behavioral biases.

Suggested Citation

  • Mohamed S. Ahmed, 2020. "A Look at Behavioral Finance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(3), pages 1-73, March.
    • Handle: RePEc:ibn:ijefaa:v:12:y:2020:i:3:p:73
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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