Chapter 2 Research methodology.

A research methodology involves specific techniques that are adopted in research process to
collect, assemble and evaluate data. It defines tools which are useful to gather relevant
information in research studies . Various types of surveys, questionnaires and studies are
common tools of any research. Research methodology is to be studied in order to check the
relevance of any theory along with its applications. Research methodology helps identify the
research activity in a meaningful manner and thereby analyse it.

2.1 Introduction:

Behavioral finance refers to a concept or notion where finance is considered as a flow of funds. It
is basically psychological action or reaction of an individual regarding that flow of funds.
Behavioural finance refers to the way investors behave according to market irregularities.
Behavioral finance is a field of study that argues that, when making investment decisions, people
are not nearly as rational as traditional finance theory makes out. For investors who are curious
about how emotions and biases drive share prices, behavioral finance offers some interesting
descriptions and explanations. Behavioral finance influences and biases can be the source for
explanation of all types of market anomalies and specifically market anomalies in the stock
market, such as severe rises or falls in stock price.

2.2 Significance/ Importance of study:

The methodology announces that Behavior of an individual investor is an important aspect. It

shows how investor’s psychology can affect or influence a particular market.