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
Module Aims
The main goal of this module is to provide students with a basic understanding of the tools of financial economics, with a particular focus on general equilibrium asset pricing. Upon completion, students should be confident in using standard techniques to address issues like the functions and functioning of financial markets, and their efficiency properties, as well as be able to deal with standard application of financial theory to equity and bond pricing.
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
| Type | Hours |
|---|---|
| Independent Study | 160 |
| Total study time | 160 |
Resources & Reading list
Principles of Financial Economics.
Notes will be made available via the course website on Blackboard.
Microfoundations of Financial Economics.
Assessment
Summative
| Method | Percentage contribution |
|---|---|
| Exam (3 hours) | 60% |
| Mid-term test | 40% |
Referral
| Method | Percentage contribution |
|---|---|
| Exam | 100% |
Repeat Information
Repeat type: Internal & External