Prof Ian Martin

Prof Martin Oehmke

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 to students on other programmes. This course uses controlled access as part of the course selection process. For information on controlled access courses, including eligibility, application processes, deadlines, and departmental contact details, please refer to the Controlled Access Courses webpage.

All students on a programme listed above 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.

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

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 seminars 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.

Problem sets, covered in classes.

Readings will be based on teaching notes and journal articles.

Continuous assessment (100%).