Behavioral finance is an important component in making investment decisions. This weeks work hopefully hi-lighted its importance. Prospect theory and its originators, Daniel Kahneman and Amos Tversky, have made a significant contribution to the investment decision process. For your second assignment, a 500-700 word paper on Prospect Theory is requested. This paper will be 5% of your final grade. It is due March 10 at 11:59PM. The paper should be address the following:

1. A brief description of Kahneman and Tversky (10% of grade)

2. Attaining the 500 minimum word requirement (20% of grade)

3. The importance of this break through work. (30% of grade) 4. How it applies to stock market decisions. (40% of grade)