Are Large Language Models Rational Investors?

arXiv:2402.12713v1 Announce Type: new
Abstract: Large Language Models (LLMs) are progressively being adopted in financial analysis to harness their extensive knowledge base for interpreting complex market data and trends. However, their application in the financial domain is challenged by intrinsic biases (i.e., risk-preference bias) and a superficial grasp of market intricacies, underscoring the need for a thorough assessment of their financial insight. This study introduces a novel framework, Financial Bias Indicators (FBI), to critically evaluate the financial rationality of LLMs, …

abstract analysis application arxiv bias biases cs.cl data domain financial harness intrinsic investors knowledge knowledge base language language models large language large language models llms market data risk trends type