Proximity Bias in Investors’ Portfolio Choice [electronic resource] /
Lindblom, Ted.author.
Mavruk, Taylan.author.
Sjögren, Stefan.author.
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 approaches on how to measure proximity bias and identifies and examines potential motives and reasons for such a bias. In addition, the book presents new analysis on the financial effects of individual investors’ proximity bias, explaining and contributing with possible policy implications on their portfolio distortion. This book will be of interest to students and researchers, as well as decision-makers in business firms and households.  .
Includes bibliographical references and index.
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.
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 approaches on how to measure proximity bias and identifies and examines potential motives and reasons for such a bias. In addition, the book presents new analysis on the financial effects of individual investors’ proximity bias, explaining and contributing with possible policy implications on their portfolio distortion. This book will be of interest to students and researchers, as well as decision-makers in business firms and households.  .
Investment banking.
Securities.
Capital market.
Investments and Securities.
Capital Markets.