COMPARATIVE ANALYSIS

BETWEEN TRADITIONAL
FINANCE AND BEHAVIOURAL
FINANCE
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NAME –

SAFA KORATIPARAMBIL

ROLL NO – F050

DIV – F

FY BBA LLB (HONS)

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HYPOTHESIS
▪ H1: Traditional and behavioural finance has helped in growth of
the financial industry.

▪ Alternative hypothesis: Traditional and behavioural finance has

led to decline in the financial industry.

RESEARCH OBJECTIVE
• To study the comparative analysis of behavioural and traditional
finance.

• To study the benefits of traditional and behavioural finance.

• To study the disadvantages of traditional and behavioural finance.

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WHAT IS TRADITIONAL AND
BEHAVIOURAL FINANCE?
▪ Traditional finance means the methods used over the years. It
includes financial methods such as getting loans, overdrafts, and
creating accounts in 'bricks and mortar' banking institutions.

▪ Behavioral finance is the study of the effects of psychology on

investors and financial markets. It focuses on explaining why

investors often appear to lack self-control, act against their own
best interest, and make decisions based on personal biases instead
of fact
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DIFFERENCE BETWEEN TRADITIONAL AND
BEHAVIOURAL FINANCE
▪ Traditional finance assumes that an investor may be a rational
one that can process all information unbiased. While
behavioral finance draws from real-world experience stating
that an investor has biases, it's irrational, and his emotions
play a task within the modest investments undertaken.
▪ Traditional finance states that the market is efficient and
may represent the financial market’s actual value, it believes
that investors have self-control. But behavioral finance
believes that the market is volatile, and that is why there are
market anomalies. Here investors do not have perfect self-
control, so limitations exist.
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CONCLUSION

▪ Traditional finance is related to decisions in which

full information's are available for making
investment decision hence if both used in a right
way can lead to efficiency and success for the
investor.
▪ .THANK YOU .