ECON7002 - Economics of Finance

Term 1


  • To provide an overview of UK financial markets and institutions
  • To provide a comprehensive introduction to the theory of finance
  • To introduce some of the most important theories explaining the formulation of prices of financial assets and the role of financial markets in the optimal allocation of risk bearing


On successful completion of the module, students should be familiar with the basic principles and concepts in finance, including:

  • Optimal portfolios
  • Equilibrium asset pricing and allocation and optimality in financial markets
  • The role of derivative securities
  • Efficiency of financial markets
  • The Capital Asset Pricing Model
Taught by:
Giulio Seccia
Assessment: 20 hours of lectures, 4 compulsory tutorial classes with 4 accompanying problem sets. 2-hour unseen written examination in Term 3. Affiliate students leaving in December will take a 2-hour written examination set up by the Department at the end of Term 1.
Suitable for:
Final year Economics (L100/L101), Econ/Geog (LL17), Phil/Econ (VL51), Econ/Stats (LG13), Math/Econ (G1L1/G1LC) and SCORE (GLN0) students. 2nd year students can also take this module but should note the pre-requisites below.
Prerequisites: Students should have taken, or be concurrently taking, ECON2001: Microeconomics or STAT3004: Decision and Risk. This module requires some knowledge of calculus, and students should be familiar with the concepts of marginal utility, marginal rates of substitution, computation of the competitive equilibrium in a static barter economy and welfare analysis. 
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