Economics

Financial Economics

Module code: L1095
Level 6
15 credits in spring teaching
Teaching method: Seminar, Lecture
Assessment modes: Coursework, Unseen examination

You are given an advanced perspective on the microeconomic principles underlying financial markets and financial decision-making.

You learn key concepts including:

  • risk and return
  • asset pricing
  • asset allocation
  • portfolio optimisation
  • financial market equilibrium
  • efficient market hypothesis. 

You also look at arbitrage pricing and pricing of options and futures, and how these can be used to understand investment decisions, and trends in financial markets. 

You must have knowledge of microeconomics, basic calculus, and statistics - and be familiar with using spreadsheet packages such as Microsoft Excel. This is for solving problem sets and developing your analytical techniques in valuation and portfolio optimisation.

Module learning outcomes

  • Have demonstrated a systematic understanding of the field of Financial Economics.
  • Have demonstrated a systematic understanding of those principles at the forefront of financial economics as they relate to problems and issues in financial markets.
  • Be able to use the power of abstraction to focus upon the essential features of a problem in financial economics and to provide a systematic framework for the coherent and evaluation of the effects of policy or other exogenous events.
  • Analyse a financial economics problem or issue using an appropriate theoretical framework, recognise its limitations and appreciate uncertainties around such analyses.