Option 1

Think of an event or a project related to your area of expertise and analyze it, point out the evidence of heuristics and biases that influenced the decision making process. How would you improve the process now that you understand the roots of these heuristics and biases?

Or you can design a trading strategy - Reversal strategy, Value strategy, Momentum strategy etc. based on some market inefficiencies you learned in this class.

Below is an example of a topic for the final paper.

The evidence that property market is inefficient or at best only weak- form efficient, suggests that property investors do not always adhere to rationality and are influenced by emotions. As such, it is considered that behavioral finance theories have a lot to offer towards analyzing property investments.

Option 2

(This is a real event that occurred less one year ago. Ill provide a video and a long article describing the history of the company and the events that took place.)

SoftBanks $4.7 billion loss on WeWork investment is one of the most recent puzzles that is difficult to be explained by the rational model.

WeWork is a company that provides shared workspace for startups and other small firms. Founded in 2010, it is headquartered in New York City.

One of the biggest investors in WeWork is SoftBanks Vision Fundwhich has a 100 billion dollars under management, making it the worlds largest tech fund.

In January 2019 SoftBank valued WeWork at $47 billion dollars.

Just a few month later WeWork, lost almost $40 billion in value after an attempt to go public backfired.

And Softbank's lost a stunning $4.7 billion (so far) on that single investment.

By using concepts that we have learn in this class can you offer an explanation on this valuation bubble or valuation illusion from behavioral finance point of view.