Dr Cristina Scherrer

This course is compulsory on the MSc in Finance and Risk. 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.

Co-requisites:

Students must complete FM403 either before taking this course or in the same year as this course.

This course aims to equip students with the fundamental concepts and tools underlying the asset markets side of modern finance. The course covers asset markets and valuation. The valuation of fixed-income securities is covered first, followed by the valuation of stocks, and derivatives such as futures and options. Concepts emphasized include the present-value formula, valuation by arbitrage, portfolio theory, the CAPM, market efficiency, and binomial and Black-Scholes models.

30 hours of seminars in the Autumn Term.

This course is taught in an interactive format. There is no distinction between lectures and classes/seminars; there are simply “sessions” where the pedagogical approach is always interactive.

Weekly problem sets covered in classes.

• J. Berk and P. DeMarzo, Corporate Finance, Pearson International Edition.
• Z. Bodie, A. Kane and A. Marcus, Investments, 8th edition, McGraw Hill. ISBN:0-07-338237-X

Full details of reading will be specified in the Course Programme and Reading List which will be distributed at the first lecture.

Continuous assessment (100%).