Behavioral Finance Questions If employee-investors are unsophisticated and unlikely to be materially influenced by educational efforts, the best way to improve the welfare of employee-investors is pe

Behavioral Finance Questions

1. If employee-investors are unsophisticated and unlikely to be materially influenced by educational efforts, the best way to improve the welfare of employee-investors is pension design.  Discuss.

2. In housing markets, there is a positive correlation between prices and trading volume. When there is a housing boom, many houses sell at, or even above, the prices asked by sellers. In times of bust, homes sit on the market for a long time with asking prices that exceed the prices that can reasonably be expected. How can this be explained?

3. Home bias has a potential information-based explanation.  Explain.

4. What does the early evidence on the ability of behavioral Investing to enhance performance tell us?  Please cite recent academic literature.

5. What is an example of an anomaly that once reported in research studies has attenuated?  Is this positive or negative from the standpoint of market efficiency?

Please answer questions in essay form with at least three paragraphs each. Please cite references that are less than five years old.