Prof Ian Martin and Prof David Webb

This course is compulsory on the MRes/PhD in Accounting (EoA) (Economics of Accounting Track) , MRes/PhD in Finance, MSc in Finance and Economics and MSc in Finance and Economics (Work Placement Pathway). This course is not available as an outside option.

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

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.

60 hours of lectures in the AT.

This course is taught in the interactive lecturing format. There is no distinction between lectures and classes/seminars; there are “sessions” only, and the pedagogical approach in each session is interactive.

Problem sets, covered in classes.

Readings will be based on teaching notes and journal articles.

In-class assessment (100%) in the ST.

(Duration: 3 hours, reading time: 15 minutes)