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A few years ago, I was fortunate to interview the CEO of Honeywell (his name was I Dave). I asked him what we should be

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A few years ago, I was fortunate to interview the CEO of Honeywell (his name was I Dave). I asked him what we should be teaching in business schools. He responded: In school they teach you that business decisions are rational and that investors are rational. They are anything but rational! Two factors dominate most business decisions - greed and fear. Rationality has very little to do with it most of the time. What is Dave talking about? Why do we teach rationality if it is so wrong? What does any of this have to do with portfolio theory? Based on what we've talked about this semester, give examples of how we teach rationality and how those examples are or are not consistent with what Dave is saying above. Be sure to connect your argument to what we have done in our Portfolio Theory & Investment Analysis course this semester. A few years ago, I was fortunate to interview the CEO of Honeywell (his name was I Dave). I asked him what we should be teaching in business schools. He responded: In school they teach you that business decisions are rational and that investors are rational. They are anything but rational! Two factors dominate most business decisions - greed and fear. Rationality has very little to do with it most of the time. What is Dave talking about? Why do we teach rationality if it is so wrong? What does any of this have to do with portfolio theory? Based on what we've talked about this semester, give examples of how we teach rationality and how those examples are or are not consistent with what Dave is saying above. Be sure to connect your argument to what we have done in our Portfolio Theory & Investment Analysis course this semester

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