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Term 1
Aims:
To provide students with the analytical skills needed to assess the main determinants of the prices and returns of any asset or investment. By the end of the course, you will be able to see how finance fits within economics and use your general economic knowledge applied to real life investment decisions. It should serve as a solid base for graduate studies in the subject or for pursuing a career in finance.
Objectives:
On successfully completing the course, students should be able to:
- Apply economic models and tools to value uncertain payoffs of arbitrary nature
- Explain the fundamental economic forces and characteristics of investments that determine their value
- Articulate the way the characteristics of different asset classes determine what approach is used to price them
- Understand the challenges for empirical asset pricing and some of the avenues of research attempting to address them
- Understand the link between finance and other fields of economics.
| Taught by: | Rodrigo Guimaraes |
| Assessment: | The course comprises 20 hours of lectures and 4 compulsory tutorial classes. Formative assessment: all students are required to submit 4 problem sets during the term for which feedback is given. Summative assessment: 2-hour unseen written examination in Term 3 (worth 100% of the overall mark). |
| Suitable for: | Final year BSc (Econ) Economics (L100, L101 and L102) students; BSc Economics and Geography (UBEECOAGEO05), BA Philosophy and Economics (UBAPHIAECO09), BSc Politics, Philosophy and Economics PPE (UBSPPESING05) and BA ESPS (UBAESPSSTU05) students. Students from other degree programmes can also take the module if they meet the prerequisite requirements. |
| Prerequisites: | The core 2nd year compulsory module: ECON0013 (previously ECON2001): Microeconomics or a suitable alternative that meets the requirements below. You should be very familiar with general equilibrium using a mathematical approach (marginal utility, constrained consumer choice and marginal rates of substitution). Because uncertainty plays a key role you must have a firm understanding of statistics. You must not only be able to manipulate and calculate an expectation, variance and covariance, but have good intuition for each of these concepts as they play a key role. In 2018/19, students who took ECON7002 previously (now ECON0048 – not taught in 2018-19) are not permitted to take this course as there will be too much overlap between previous version of ECON7002 and this new offering. |
Moodle page: Maximum module enrolments: | 150 |
