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The University of Southampton

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


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 analysed including CAPM and Factor Models.

Learning and Teaching

Teaching and learning methods


Independent Study160
Total study time200

Resources & Reading list

Danthine, I.P and Donaldson J.B.. Intermediate Financial Theory. 

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

Bailey, R.E. (2014). The Economics of Financial Markets. 



Problem solving


MethodPercentage contribution
Coursework 20%
Home assignment 80%


MethodPercentage contribution
Home assignment 100%


MethodPercentage contribution
Home assignment 100%

Repeat Information

Repeat type: Internal & External

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