GBUS 8428 - Investment Strategy and Arbitrage

Investment decision makers often experience a tension between the decision rules commonly found in practice and those proscribed in theory. The resolution of this tension creates a dilemma for investment professionals. Some may choose to blindly accept theory and ignore the real-world realities of the market place. Others may choose to casually dismiss financial theory as unrealistic and irrelevant. Because either of these responses is likely to be perilous, this course seeks to fill the need for a more balanced response. Students may begin the course understanding that traditional finance theory relies on a set of fundamental assumptions about the behavior of buyers and sellers of financial securities and conditions of the market in which they trade. This course surveys areas of common departure from the traditional assumptions of investor behavior and market conditions with a view to evaluating their impact on investment decision rules. (Y)

Credits: 1.5