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The University of Southampton
Courses

ECON6029 Financial Economics and Asset Pricing

Module Overview

The goal of the first part is to encourage a basic understanding with the tools of financial economics with particular emphasis to general equilibrium asset pricing. Upon completion students should be confident in using standard techniques in order to address issues like the functions of financial markets and their efficiency properties as well as their traditional application to equity and bond pricing.

Aims and Objectives

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • Derive from basic principles the workhorse model of financial economics
  • Be able to manipulate the model to address common empirical and theoretical applications. Students should be comfortable taking the model to data with standard applications
  • Be able to solve the model and derive general results.
  • Be able to vary the model and build arguments to study a wide variety of applications
  • Be able to price a variety of assets

Syllabus

The course includes an examination of basic analytical frameworks such as expected utility and probability theory. A thorough General Equilibrium approach is the backbone of the course. Various popular asset pricing models are formally analyzed including CAPM and Option Pricing.

Learning and Teaching

Teaching and learning methods

.

TypeHours
Independent Study160
Teaching40
Total study time200

Resources & Reading list

Principles of Financial Economics. 

Notes will be made available via the course website on Blackboard. 

Microfoundations of Financial Economics. 

Assessment

Formative

Mid-term test

Summative

MethodPercentage contribution
Exam  (3 hours) 100%

Referral

MethodPercentage contribution
Exam 100%

Repeat Information

Repeat type: Internal & External

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