2 Seperate Discussion Questions

Part 1: There is evidence that small stocks and value stocks perform better over the long term than the market averages. What are some logical reasons for this phenomenon? Part 2: There is strong evidence that many investors suffer from familiarity bias and overconfidence bias. Can you explain why these biases might exist? Can you think of a situation in which you might make these mistakes (if you hadn’t learned about these biases in this module)? Include some news that is less than a year old that is applicable to this discussion.

Points from the professor:

Class: For the week 5 discussion...you may wish to include a discussion/observation regarding the process (somewhat involved) with selecting individual stocks for a given portfolio... If in fact, part '1' is correct...then, 'how' does the average retail investor 'find' these firms and, properly analyze/follow said firms As to part 2 of this question...does a familiarity and/or overconfidence have anything to do with what the 'street' calls a 'herd' mentality...? 'How' might an investor avoid these areas (Herd or other market dysfunction's)... 'What' value might professionally managed portfolio's (mutual funds) offer to both parts 1 and 2 of this discussion question...?

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Discussion #2:

Discuss how you would use the material covered in this module for a future position in management.

Topics covered in this Module:

•Explain the elements of project management.

•Use manual CPM/PERT techniques to solve for the critical path for a project.

•Compare the different methods for solving more complicated versions of these type problems.