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Can ChatGPT Overcome Behavioral Biases in the Financial Sector? Classify-and-Rethink: Multi-Step Zero-Shot Reasoning in the Gold Investment

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  • Shuoling Liu
  • Gaoguo Jia
  • Yuhang Jiang
  • Liyuan Chen
  • Qiang Yang

Abstract

Large Language Models (LLMs) have achieved remarkable success recently, displaying exceptional capabilities in creating understandable and organized text. These LLMs have been utilized in diverse fields, such as clinical research, where domain-specific models like Med-Palm have achieved human-level performance. Recently, researchers have employed advanced prompt engineering to enhance the general reasoning ability of LLMs. Despite the remarkable success of zero-shot Chain-of-Thoughts (CoT) in solving general reasoning tasks, the potential of these methods still remains paid limited attention in the financial reasoning task.To address this issue, we explore multiple prompt strategies and incorporated semantic news information to improve LLMs' performance on financial reasoning tasks.To the best of our knowledge, we are the first to explore this important issue by applying ChatGPT to the gold investment.In this work, our aim is to investigate the financial reasoning capabilities of LLMs and their capacity to generate logical and persuasive investment opinions. We will use ChatGPT, one of the most powerful LLMs recently, and prompt engineering to achieve this goal. Our research will focus on understanding the ability of LLMs in sophisticated analysis and reasoning within the context of investment decision-making. Our study finds that ChatGPT with CoT prompt can provide more explainable predictions and overcome behavioral biases, which is crucial in finance-related tasks and can achieve higher investment returns.

Suggested Citation

  • Shuoling Liu & Gaoguo Jia & Yuhang Jiang & Liyuan Chen & Qiang Yang, 2024. "Can ChatGPT Overcome Behavioral Biases in the Financial Sector? Classify-and-Rethink: Multi-Step Zero-Shot Reasoning in the Gold Investment," Papers 2411.13599, arXiv.org.
  • Handle: RePEc:arx:papers:2411.13599
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