1. Fin 4201/8001 1 Lklklk Behavioral Finance

2. Fin 4201/8001 2 Lklklk Overconfidence

3. Fin 4201/8001 3 Better than a poke in the eye with a sharp stick Disposition effect - Reference points Pride & Regret = Pain & Pleasure

4. Fin 4201/8001 4 House Money Cognitive dissonance Consider the past

5. Fin 4201/8001 5 Lklklk Mental Accounting

6. Fin 4201/8001 6 Lklklk Forming Portfolios

7. Fin 4201/8001 7 Representativeness and Familiarity

8. Fin 4201/8001 8 Lklklk Social Interaction

9. Fin 4201/8001 9 Lklklk Emotion and Decision

10. Fin 4201/8001 10 Lklklk Self Control and Decisions

11. Fin 4201/8001 11 Prospect Theory Value Function

12. Normal Distribution A large enough sample drawn from a normal distribution looks like a bell-shaped curve. Probability Return on large company common stocks 99.74% – 3  – 49.3% – 2  – 28.8% – 1  – 8.3% Mean 12.2% + 1  32.7% + 2  53.2% + 3  73.7% The probability that a yearly return will fall within ± 1 standard deviation (± 20.5%) of the mean is approximately 68%. 68.26% 95.44%