The Study of Behavioral Factors in Optimal Portfolio Selection

The purpose of this study is specifying the role of behavioral finance in optimal portfolio selection. In this research accepted companies in Tehran Stock Exchange have been considered for 5 year period (from 2009 to 2013) and by examining 106 companies and using regression and analysis of variance techniques, the effect of behavioral factors in forms of mental accounting and loss aversion in investment stock on selecting the optimal portfolio with high efficiency is compared to standard finance. This research includes one main hypothesis and two sub hypotheses. According to this research the expected return of selected portfolio in behavioral model with an emphasis on mental accounting and loss aversion (as indicators of behavioral factors) has greater return than the standard model, so the result of research confirmed these hypotheses.

Behavioral Finance, Standard Finance, Portfolio Selection, Expected Return