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Behavioral Finance Questions & Answers

MEANING:
1. Investor awareness:
Investor Awareness is a term used in investor relations, by public
companies and similar bodies, to describe how well their investors, and
the investment market in general, know their business.
2. Investor sentiment:
Market sentiment is the general prevailing attitude of investors as to
anticipated price development in a market. This attitude is the
accumulation of a variety of fundamental and technical factors,
including price history, economic reports, seasonal factors, and
national and world events.
3. demographic variables:
Personal statistics that include such information as income level,
gender, educational level, location, ethnicity, race, and family size. For
example, the marketing department of a business might use
demographic variables as an important input when formulating target
customer profiles.
4. Investor risk averse:
A description of an investor who, when faced with two investments
with a similar expected return (but different risks), will prefer the one
with the lower risk.
5. Social responsibility investments:
(SRI), also known as sustainable, socially conscious, "green" or ethical
investing, is any investment strategy which seeks to consider both
financial return and social good. In general, socially responsible
investors encourage corporate practices that promote environmental
stewardship, consumer protection, human rights, and diversity. Some
avoid businesses involved in alcohol, tobacco, gambling, pornography,
weapons.
6. Market factor:
Any external agent that affects the demand for or the price of a good
or service.
7. Social factor:
The facts and experiences that influence individuals' personality,
attitudes and lifestyle. The marketing department of a business needs
to take into account the various social factors characteristic of the
consumer groups it is targeting to help increase a product's appeal to
those potential buyers.
8. Economic factor:

The set of fundamental information that affects a business or an


investment's value. Various economic factors need to be taken into
account when determining the current and expected future value of a
business or investment portfolio. For a business, key economic factors
include labor costs, interest rates, government policy, taxes and
management.
9. Risk factor:
Measurable characteristic or element, a change in which can affect the
value of an asset, such as exchange rate, interest rate, and market
price.
10.
Cost factor:
Cost estimating relationship in which a cost is directly proportional to
one independent variable, such as a certain percentage of the material
consumed in producing a good.
11.
Performance factor:
The accomplishment of a given task measured against preset known
standards of accuracy, completeness, cost, and speed. In a contract,
performance is deemed to be the fulfillment of an obligation, in a
manner that releases the performer from all liabilities under the
contract.
12.
Online technology factors:
Influences that have an impact on how an organization operates that
are related to the equipment used within the organization's
environment. Due to increased reliance on equipment, technological
factors currently exert a considerably more important effect on the
success of a business than they did only a hundred and fifty years ago.
13.
E-knowledge management:
e-knowledge is creating new standards, structures, processes, best
practices, business models, and strategies for creating and exchanging
data, information, and knowledge.
14.
Investor behavior:
When it comes to money and investing, we're not always as rational as
we think we are - which is why there's a whole field of study that
explains our sometimes-strange behavior.
15.
Investment decisions:
A determination made by directors and/or management as to how,
when, where and how much capital will be spent on investment
opportunities. The decision often follows research to determine costs
and returns for each option.