FM436 One Unit
Financial Economics
This information is for the 2025/26 session.
Course Convenor
Prof Ian Martin
Prof Martin Oehmke
Availability
This course is compulsory on the MRes in Accounting (EoA) (Economics of Accounting Track), MRes 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 to students on other programmes. This course uses controlled access as part of the course selection process.
All students on a programme listed under the Course Availability will be given a place. This course is closed to outside students and does not permit auditing students.
Please contact finance.teachingmanager@lse.ac.uk with any queries.
This course does not permit auditing to outside students.
Requisites
Additional requisites:
Students must have completed Introductory Course in Mathematics and Statistics (EC400).
In exceptional circumstances, students may enrol in the course without EC400 provided they have received approval from either
- The MSc Finance and Economics Programme Director and Associate Programme Director; or
- From the PhD Programme Director if they are an MRes/PhD student
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
60 hours of lectures in the Autumn Term.
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.
Formative assessment
Problem sets, covered in classes.
Indicative reading
Readings will be based on teaching notes and journal articles.
Assessment
Continuous assessment (100%)
Key facts
Department: Finance
Course Study Period: Autumn Term
Unit value: One unit
FHEQ Level: Level 7
CEFR Level: Null
Total students 2024/25: 53
Average class size 2024/25: 53
Controlled access 2024/25: YesCourse selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Personal development skills
- Problem solving
- Application of numeracy skills
- Specialist skills