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FINC 315 > Chapter 2: Behavior > Flashcards

Chapter 2: Behavior Flashcards

1
Q

Basic Developmental

A

Believes that human development occurs in stages over time.

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2
Q

Basic Humanistic

A

people are good

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3
Q

Basic Cognitive

A

behavior by reinforcement

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4
Q

Societal groups use a system of signs in their communication process.

A

A sign could be a word, object, gesture, tone, quality image, substance, or other references to a shared meaning for communication purposes.

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5
Q

Nonverbal cues

A

body position and body movement are important while voice tone and voice pitch are also telling

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6
Q

Active Listening

A

Requires the listener’s undivided attention. Observe speaker’s body language

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7
Q

Reflective Listening

A

Occurs when the receiver devotes attention to both the content being said and the feelings expressed.

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8
Q

Passive Listening

A

invoked when communication rests entirely on another person and the person receiving the information sits back and listens.

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9
Q

Motivational Interviewing

A

Focuses on overcoming ambivalence to change by guiding the client to (1) express their motivation for change, (2) discover their ability to change, and (3) commit to making the change.

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10
Q

Partnership MI

A

MI is a collaborative partnership

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11
Q

Evocation MI

A

MI draws out the client’s priorities, values, and wisdom to explore reasons for change and support success.

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12
Q

Acceptance MI

A

The MI practitioner is nonjudgmental, seeks to understand the client’s perspectives and experiences, expresses empathy, highlights strengths, and respects a client’s right to make informed choices about changing or not changing

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13
Q

Compassion MI

A

The MI practitioner actively promotes and prioritizes clients’ welfare and wellbeing in a selfless manner

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14
Q

Open Question

A

One that will result in a person answering with a lengthy reponse

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15
Q

Closed Question

A

Seeks a response that is very specific and commonly involves an answer that can be accomplished with a single word or two.

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16
Q

Collecting Client Data

A

The planner must seek to understand the beliefs, attitudes, and desires of the client.

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17
Q

Mirroring

A

Occurs when the planner synchronizes his or her verbal and nonverbal behavior, including body language, gestures, breathing, and language and voice quality, with those of the client. Shows agreement and affirmation.

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18
Q

Joining

A

Making a connection with the client and establishing a trusting relationship

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19
Q

Unconditional positive regard

A

showing respect, acceptance, and understanding the client’s wishes.

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20
Q

Integrity

A

Having strong morals and ethics

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21
Q

Traditional Finance has four basic premises

A
  1. Investors are rational
  2. Markets are efficient
  3. Mean-Variance Portfolio Theory governs
  4. Returns are determined by risk
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22
Q

Mean-Variance Portfolio Theory

A

A technique that investors use to make decisions about financial investments, based on the amount of risk that they are willing to accept

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23
Q

Behavioral Finance

A
  1. Investors are normal
  2. Markets are not efficient
  3. The behavioral portfolio theory governs
  4. Risk alone does not determine returns
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24
Q

What makes investors normal instead of rational?

A

Cognitive biases, errors, and being human

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25
Q

Behavioral Portfolio Theory

A

The theory is that there are certain behavioral biases that lead investors to make decisions, which in turn leads to lower returns.

26
Q

Anchoring

A

Attaching, or anchoring, one’s thoughts to a reference point even though there may be no logical relevance or is not relevant to the issue in question.

27
Q

Confirmation Bias

A

People tend to filter information and focus on information supporting their opinions

28
Q

Affect Heuristic

A

A heuristic is a tool used in the minds of people, also known as a “rule of thumb”

29
Q

Availability Heuristic

A

When a decision-maker relies upon the knowledge that is readily available in his or her memory, the cognitive heuristic known as “availability” is invoked

30
Q

Similarity Heuristic

A

The mind of the individual goes back to a previous situation even if it’s not the same.

31
Q

Confirmation Bias

A

People tend to filter information and focus on information supporting their opinions.

32
Q

Herding

A

A person’s desire to conform or be accepted by a certain group.

33
Q

Gambler’s Fallacy

A

In the realm of probabilities, misconceptions can lead to faulty predictions as to occurrences of events

34
Q

Recency Bias

A

Occurs when too much weight is given to recent observations or stimuli versus long-term historical trends

35
Q

Hindsight Bias

A
36
Q

3 theories used in traditional finance

A
  1. Mean-Variance Theory
  2. Modern Portfolio Theory
  3. The Capital Asset Pricing Model
37
Q

question 18

A
38
Q

question 20

A
39
Q

Prospect Theory

A

Provides that people value gains and losses differently and will base their decisions on perceived gains rather than perceived losses.

40
Q

The Disposition Effect

A

The disposition effect is an anomaly discovered in behavioral finance. It relates to the tendency of investors to sell assets that have increased in value while keeping assets that have dropped in value.

41
Q

Stages of Change

A
  1. Pre-Contemplation
  2. Contemplation
  3. Preparation
  4. Action
  5. Maintenance
42
Q

Stages Pre-Contemplation

A

no intent to change

43
Q

Stages Contemplation

A

Aware that change is needed and considering making change, but not yet ready to take action

44
Q

Stages Preparation

A

Gathering information in preparation to make a change

45
Q

Stages Action

A

Action is taken to implement the plan

46
Q

Stages Maintenance

A

Prevention of relapse

47
Q

Money Belief

A
48
Q

Four broad categories of money scripts

A
  1. Money avoidance
  2. Money worship
  3. Money status
  4. Money vigilance
49
Q

Money avoidance

A

Try not to think about money. Believe they do not deserve money

50
Q

Money Worship

A

Buy things in an effort to create happiness

51
Q

Money Status

A

Need to keep up the appearance of being successful

52
Q

Money Vigilance

A

Are alert and watchful in matters concerning their finances

53
Q

Compulsive Buying Disorder

A

Characterized by excessive preoccupation with shopping and spending that leads to distress.

54
Q

Hoarding

A

accumulating and being unable to discard possessions that most people would consider worthless.

55
Q

Gambling Disorder

A

Mental health disorder in which gambling leads to significant impairment and stress

56
Q

Workaholism

A

A compulsive disorder that is often associated with anxiety or depression.

57
Q

Financial Enabling

A

Reliance on unearned income from another person. Fear of being cut off.

58
Q

Sources of money conflict

A
  1. Financial Infidelity -knowledge by spouse or partner
  2. Saving
  3. Spending
  4. Priorities
  5. Requests for assistance
  6. financial enmeshment -when parents involve children in financial decisions
59
Q

Intrinsic Motivation

A

comes from within and is often associated with satisfaction and enjoyment

60
Q

Extrinsic motivation

A

comes from an outside reward, you expect to get something in return

61
Q

There are three main psychological needs that determine motivation:

A

Competence + Relatedness + Autonomy = intrinsic motivation

62
Q

Cognitive Evaluation Theory

A

A sub-theory of SDT which asserts that social-contextual events such as feedback, communication, and rewards, that are conducive to feelings of competence can enhance intrinsic motivation.

FINC 315 (2 decks)

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