Behavioral Finance
Spring Semester, 2022
The Guidelines for the Group Project
As investment advisors you will present to the CFO and other investment advisors your critical analysis on your investor's type and behavioral biases along with presenting your suggested asset allocation that is appropriate for your investor.
Each group should include the followings in the professional report and presentation:
1) Investor Background, each group should:
· Describe the investor's demographic profile in details (including gender, education, background, age, occupation, income and wealth).
· Each group should indicate how investor's demographic background impact his/her investment behavior.
2) Investor Analysis: Based on your questionnaire and interview with the investor (include the questions and the answers in the presentations and professional reports), each group should:
· Identify the investor's Passive or Active Traits
· Describe the investor personality (lifestyle, stable, information, goal setting)
· Describe and explain the investor type ( Preserver, Follower, Independent, Or Accumulator)
· Indicate and explain the investor's risk tolerance level (low, medium, high).
· Describe the investor's confidence and investment literacy levels.
· Describe and explain the investor's investment horizon (short, medium, long).
3) Investor's behavioral biases: Each group should:
· Explain in details the process of identifying the investor's two assigned behavioral biases.
· Describe the assigned behavioral biases and associate them with the investor background, type, personality risk tolerance, and investment horizon.
· Indicate the primary bias based on your investor type.
· Provide a professional advice for your investor based on his/her behavioral biases.
4) Investor's Suggested Portfolio: Each group should:
· Build a pyramid with different layers based on the investor's goals, demands, investor's type and behavioral biases (Explains each layer).
· Indicate and explain whether you will adapt or moderate your investor's behavioral biases.
· Explain in details the suggested asset allocation and how such asset allocation is the most suitable for your investor and his/her behavioral biases.
· Construct a portfolio that is suitable for your investor based on his/her behavioral biases and investor type.
***The professional report should include the above four points (explained in details and with critical analysis). It must be professionally well written