Thursday, September 26, 2019

An investment scheme to finance boot camps Research Proposal

An investment scheme to finance boot camps - Research Proposal Example This is to ensure that children attention is arrested before they are swayed by peer pressure. Behavioral finance is a new field that tries to combine both the behavioral and cognitive physiology in explaining the reasons why people make financial decisions that are irrational. The financial decisions being made by various institutions mandated with protecting the interests of the vulnerable children are failing to capture the real issues that need to be addressed in order to improve the living standards of the children. Exposing the children to some environment is playing a significant role in diverting them towards the education. As a result, they end up not helping their parents once they grow up (Maisel 2014). Therefore, it is critical to understand the importance of behavioral finance especially while making financial decisions that will affect other people. Investor behavior keeps on deviating from logic and reason. The behavior is mainly affected by emotional processes, mental mistakes, and individual personality. These make it very hard to make decisions. Therefore, investment is not a matter of analyzing numbers. Instead, a large part of investment is embedded on the individual behavior. There are many types of behavioral biasness while investing. For instance, cognitive bias can be seen as a rule of thumb which can lead to a systematic deviation from the correct judgment. Some of the common behavioral biasness that can affect the investors’ decisions includes representativeness, worry, disposition effect, familiarity bias, anchoring, and self-attribution biasness (Maisel 2014). In economics, financial intermediation is a process that involves borrowing money and lending it to other parties that are in dire need for financial support. Children act as an important investment for any government or society. Therefore, in this case, the money from the investors will be used to finance different activities being undertaken in the boot camps.

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