The Behavioral Finance Perspective: is it important?


I really do not like studying Behavioral Finance, I find very difficult to memorize the topics and the different theories, biases etc.

Is it reallly important to remember everything?

Do you have any hint?

Yes, they are very important because among many other things they need to be thought of during creation of an IPS both from the perspective of the exam and real life.

As far as advice is concerned, you might want to break up the material between cognitive and emotional biases. After that, cognitive biases are broken down to believe maintenance (4), data processing (5) while emotional biases are broken down into 6 types. It sucks in the beginning but after some time of studying you should be OK.

Everything is important! No shortcuts!

Its only important if you want to get top 90%tile. If you aim for MPS, its not important at all.

Realistically, of course and even from the CFA standpoint. All sorts of price discrepancy in the market today is due to our irrationality so yeah its a huge deal.

is this true? since you’ve taken the exam

I disagree. Study the topic so you at least get the low-hanging apples.

A lot of the questions are softball tosses.

Just pure memorization


Do not Punt Behavior Finance. Some of us are just not wired to understand BF let alone master it. I was one of hem and in my first attempt of Level 3, I was handed a Band 10, thanks to IPS and BF. Even though the weightsge seems to be somewhat relaxed, do not fall for the apparent leeway.