FM436     
Financial Economics

This information is for the 2016/17 session.

Teacher responsible

Prof Ian Martin and Dr Igor Makarov

Dr Martin Oehmke

Availability

This course is compulsory on the MRes/PhD in Finance (Route 1), MSc in Finance and Economics and MSc in Finance and Economics (Research). This course is available on the MPhil/PhD in Accounting. This course is not available as an outside option.

Pre-requisites

Mathematical background at the level of the September Courses in Mathematics and FM458 Financial Economics Preparatory Course is assumed.

Course content

Financial Economics provides students with an in-depth introduction to the theories of asset pricing and corporate finance. The course analyses investors’ behaviour, market equilibrium, the pricing of securities, the valuation of real assets, and capital structure choice. Topics in asset pricing will encompass portfolio choice, complete and incomplete markets, mean-variance portfolio theory and equilibrium asset pricing, pricing with no arbitrage, Black-Scholes and other contingent claims pricing models, and the behaviour of financial markets during crises. Topics in corporate finance will encompass valuation methods and financing decisions in the presence of taxation, agency frictions, and asymmetric information.

Teaching

40 hours of lectures and 20 hours of seminars in the MT.

Formative coursework

Problem sets, covered in classes.

Indicative reading

Will be based on: Teaching notes and journal articles, as well as J H Cochrane, Asset Pricing, Revised Edition, Princeton University Press.

Assessment

Exam (100%, duration: 3 hours) in the main exam period.

Key facts

Department: Finance

Total students 2015/16: 46

Average class size 2015/16: 17

Controlled access 2015/16: Yes

Lecture capture used 2015/16: Yes (MT)

Value: One Unit

Guidelines for interpreting course guide information

Personal development skills

  • Problem solving
  • Application of numeracy skills
  • Specialist skills

Course survey results

(2012/13 - 2014/15 combined)

1 = "best" score, 5 = "worst" score

The scores below are average responses.

Response rate: 71%

Question

Average
response

Reading list (Q2.1)

2.2

Materials (Q2.3)

2.3

Course satisfied (Q2.4)

1.8

Lectures (Q2.5)

1.8

Integration (Q2.6)

1.9

Contact (Q2.7)

2

Feedback (Q2.8)

2.1

Recommend (Q2.9)

Yes

74%

Maybe

21%

No

5%