Proximity Bias in Investors’ Portfolio Choice

• Main Authors: Lindblom, Ted (Author), Mavruk, Taylan (Author), Sjögren, Stefan (Author)
• Corporate Author: SpringerLink (Online service)
• Format: Electronic eBook
• Language: English
• Published: Cham : Springer International Publishing : Imprint: Palgrave Macmillan, 2017.
• Subjects: Finance.; Investment banking.; Securities.; Capital market.; Investments and Securities.; Capital Markets.

This book helps readers understand the widely documented distortion in the portfolio choice of individual investors toward proximate firms – the proximity bias phenomenon. First, it recapitulates the fundamentals of modern portfolio theory. It then goes on to describe and demonstrate different appro...

Table of Contents:

• Chapter 1: Investor portfolio choice and portfolio theory
• Chapter 2: Decision-making—Rational, Bounded or Behaviorally biases
• Chapter 3: Market efficiency and the standard asset pricing models used to test market efficiency
• Chapter 4: The Financial Behavior of Individual Investors
• Chapter 5: The Measurement of Proximity Bias
• Chapter 6: Motives and Reasons for Proximity bias
• Chapter 7: Local Bias and Capital Structure
• Chapter 8: Local news and active trading
• Chapter 9: Portfolio rebalancing by individual investors and flight to safety
• Chapter 10. The relation between local bias, international home bias and financial sophistication
• Chapter 11: Conclusions and implications.