Model Of Perceived Return Estimation And Design For Estimation System

According to the result of behavioral finance, the investors are not full rationality but bounded rationality, and their arbitrage behavior is also limited which can not restrict the securities' price. So within the frame of behavioral finance, it's a limitation to use the measurement of traditional finance to estimate the return of securities. If we want a general estimation of the security returns, we must take the bounded rationality of investors into account. And it has become an important research direction in future study of behavioral finance to combine the investors' bounded rationality with present models and to explain market anomalies.In our model we consider the degree of investors' conservatism bias and representative heuristic bias and the proportion of the two type of investors which influence investors' perceived return. If the degree and proportion of the conservatism investors is lager, the perceived return of the whole investors is smaller, and if the degree and proportion of the representative heuristic investors is lager, the perceived return of the whole investors is bigger. Present articles study on the basis of history data but they don't take the investors' bounded rationality into account. On the basis of the investor's conservatism and representative heuristic bias, this paper studies the impact of investor's psychology on expected securities return. By combining the methods in the models of BSV and DHS, we establish a model to estimate investor's perceived return based on the two kinds ofbiases.According to the estimation model of perceived return we have established and the factors which influence it, we design a estimation system of investors' perceived return and realize it with software of Visual Basic 6.0 and Access 2000, so that it can assist investors in choosing the most proper investing strategy. Finally, an empirical perceived return about companies is analyzed based on the database of China securities business, and the investor strategy suggestions are also given.