Risk Management Decisions

Topic: “Managerial behavioural biases in financial institutions have been one of the main causes of the global
financial crisis (2007 – 2009).” Using the concepts of risk aversion, loss aversion, information asymmetry and
heuristics, critically discuss this statement while giving practical examples and utilising real-life case studies.
Extra information:
1) A maximum word count (1,500 word). 10% tolerance
2) The references must be used only from reliable sources such as books, journals and the textbooks (from
Google Scholar, Jstor and etc.)
3) The overall word count includes: citations and quotations, headings and subheadings
The overall word count excludes:
1) The references or bibliography at the end of the coursework
2) Figures and tables (only if they contain numbers or stats)
3) Appendices (do not use them unless necessary; they are not marked!)
4) Don’t write a long introduction. In particular, there’s no need to introduce basic concepts (risk etc) unless
they’re critical
5) Up-to-date materials are prioritised and are urged to be used rather than outdated materials
Text format:
Font: Verdana, 11 point
Spacing: 1.5 spaced
Margins: Normal (2.5 cm)
Referencing (Harvard citation style)
15 references are needed for this essay
There is no need to define what is information asymmetry, heuristics, loss aversion, risk aversion. We were told
to consider this information to be already acknowledged by professor, so we don’t waste number of words on
definition of simple terms.
Also, when it will come to heuristics, only choose and compare with each other, two heuristics from seven
(Affect Heuristi, Availability Heuristic, Representativeness Heuristic, Anchoring Heuristic, Hindsight Bias,
Desire for Certainty and Illusion of Control)
You can also consider discussing pros and cons of risk aversion; causes and effects of information asymmetry,
comparing two heuristic, pros & cons of managerial incentives etc. Most important is that the discussions are not
just descriptive where students only define and describe things without digging dip into things by critically
discussing given statement while giving practical examples and utilising real-life case studies.

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