Behavioral finance terms terms

bchadwick

I have compiled a list of what I think are the most important behavioral finance errors that are likely to be tested. In the event that a list of choices is not provided on the exam, I will choose from this mental list.

I have been looking through old exams, and it seems that the CFAI has changed the terminology for various behavioral traits over the years, so I have excluded terms that do not appear in the current curriculum (e.g. recallability, reference dependence, mental accounting). Please feel free to post a modified version of this list.

- Representativeness
- Overconfidence
- Anchoring-and-adjustment
- Aversion to ambiguity
- Loss aversion
- Self-control
- Regret minimization
- Money illusion
- Pyramids
- Naive diversification
- Status quo bias
- Endorsement effect
- Familiarity bias
- Home bias



Edited 1 time(s). Last edit at Sunday, May 30, 2010 at 03:12PM by nedust.

wake2000

ROAA = Reference, Overconfidence, Aversion to Ambiguity, Anchoring

Chuckrox

Hahaha ocraps, I like it! Got a good one for the regular behavioral finance terms?

susana

SCRAPO for traps....

or OCRAPS

lcai

overconfidence aimiee

Unforseen

Don't forget the forecasting traps (anchoring, status quo, confirming evidence, recallability, prudence, and the last one that I always forget). They are technically part of econ or capital markets expectations but the 2007 "behavioral finance" section was all forecasting traps.

thommo77

Forget the Schweser terms... those specific words are not going to get you far on the test.

IAmNeil

still a week's time ... get whatever u can lay your hands to ... we are all doing that.

Windjam

Haha, well you can tell how I studied.

skycfa

yes ... each of them. either in schweser or in cfa. mostly the ones you have missed out are from CFA text.