M行为金融学试卷B答案

北京师范大学珠海分校

2011—2012学年度第二学期期末考试（B卷答案）

开课单位：国际商学部课程名称：行为金融学

任课教师：郑勇考试类型：闭卷考试时间：90 分钟

一．Differentiate the following terms/concepts: (40)

1. Better-than-average effect and illusion of control

The better-than-average effect refers to the tendency for a person to rate himself as above average. If you are subject to illusion of control, this indicates a tendency to think that you have more control over events than can objectively be true.

2. Mood and emotion

A mood is a general feeling that does not focus on anything in particular,

whereas an emotion is a mental and physiological state defined by observable features.

3. Good company and good stock

A good company has positive attributes such as a strong management team.

A good stock is one you expect to outperform in the future. If markets are

efficient there are no good or bad stocks.

4.Sensation seeking and overconfidence

Overconfidence in its various manifestations has been extensively discussed in the chapter. Sensation-seeking on the other hand is a personality trait whose four dimensions are thrill and adventure seeking (i.e., a desire to engage in thrilling and even dangerous activities); experience seeking (i.e., the desire to have new and exciting experiences, even if illegal); disinhibition （去抑制）(i.e., behaviors associated with a loss of social inhibitions); and boredom susceptibility （厌倦情感）(i.e., dislike of repetition of experience).

5.Regret and disappointment

Regret and disappointment are negative emotions. When a person is disappointed he is unhappy about an outcome. With regret the person is also sorry about a decision that cannot be changed, but regret is a stronger emotion than disappointment.

二. Answer the following questions:

1. Why are two people who witnessed the same event last month likely to describe it

differently today?

Memory is very imprecise（记忆不准确）. The common view that past experiences have somehow been written to the brain’s hard-drive and are then retrieved, even if at considerable effort, is not the way our brain works（脑袋运作）. In fact, memory is reconstructive（重构的）. Therefore people in remembering some event will reconstruct it in different ways.

2.Is miscalibration greater for easy questions or hard questions? Is it greater when we

look at 50% confidence ranges or 98% confidence ranges?

Miscalibration tends to be greater for hard questions. Sometimes one can even be underconfident in the case of easy questions. This is called the hard-easy effect.

Also, miscalibration tends to be greater in the tails (98% ranges vs. 50% ranges).

3. Put yourself in the place of an equity mutual fund manager. Think of all the stocks

you might select for inclusion in the portfolio. How would emotions enhance your decision-making process?

Emotions help the decision-maker sift through that mountain of available information and make a decision when one needs to be made.

4. In Canada there are two official languages, French and English. Some Canadian

corporations are headquartered in Quebec where French is the official language.

Most however are headquartered outside Quebec where English is dominant. Would you expect Quebecers to invest more in Quebec companies, and non-Quebecers to invest more in companies based outside Quebec? Also, do you think the first language of the CEO might matter in accounting for investor preferences? （你认为CEO的第一语言可能对解释投资者偏好关系重大吗？）Explain.

We would expect to see the same as in the study using Finnish data where the two languages/ethnicities（种族）were Swedish and Finnish. Specifically, we would expect to see English-speaking investors(Non-Quebecers) preferring companies based outside of Quebec and French-speaking investors（Quebecers）preferring companies based inside of Quebec. Similarly, we might expect to see a preference on the part of English-speaking investors for English-speaking CEOs (and the same for French-speaking investors).

5. What evidence is there that people do not diversify enough? Why is it that this occurs?

What is the simplest way to “buy” a high level of diversification in an equity portfolio?

In one study 3,000 U.S. individual portfolios were examined. Most held no stock at

all. Of those households which did hold stock (more than 600), it was found that the

median number of stocks in portfolios was only one. And only about 5% of

stock-holding households held 10 or more stocks. Most evidence says that to achieve

a reasonable level of diversification, one has to hold more than 10 different stocks

(preferably in different sectors of the economy). Thus it seems clear that many

individual investors are quite under diversified.

三．Calculating and explain (20)

1. Which description of Mary has higher probability?

a. Mary loves to play tennis.

b. Mary loves to play tennis and, during the summer, averages at least a

game a week.

Explain your answer. Define the conjunction fallacy. How does it

apply here? Assume for the purpose of illustration that the probability

that someone loves to play tennis is .2; the probability that someone

plays tennis once or more a week during the summer is .1; and the

probability of one or the other of these things is .22.

Pr(loves tennis) = .2

Pr(loves tennis AND averages 1+)

= Pr(loves tennis) + Pr(averages 1+) - Pr(loves tennis OR averages 1+) = .2 + .1 - .22 = .08

The second probability has to be less because it has one more requirement

(not only do you have to love tennis but you also have to play regularly,

but some tennis lovers might just be too busy to do this). When people

commit the conjunction fallacy (the belief that the joint probability

is more likely than one of its components), they will think the second

(joint) event is more likely because it sounds logical that someone who

loves tennis will also play regularly.

2. Consider two investors (A and B) with the following demand curves for a

stock:

A: p = 100 - q

B: p = 150 – 2q

a.At a price of $60, how much will A and B purchase?

Substituting $50 into the above demand functions gives us q=40 for A and q=45 for B as well.

b.if the price falls to $40, who will increase their holdings more? Explain.

Now we redo the exercise for a price of $40. Now q=60 for A and q=55 for B.

To go from 50 units, A would have to buy 20 and B would have to buy 10 units.