![]() ![]() See the library reading list for this module (Canterbury) Learning outcomesīy the end of the module, you will be able to: (2006), Options, Futures, and Other Derivatives, 6th ed., Prentice Hall. (1996), Against the Gods - the Remarkable Story of Risk, John Wiley.Ĭampbell, Lo and MacKinlay (1997) The Econometrics of Financial Markets, 1st ed., Princeton University Press.įabozzi, Neave and Zhou (2012) Financial Economics, 1st ed., Wiley & Sons. ![]() (2005), The Economics of Financial Markets, Cambridge University Press.īernstein, P.I. Reassessment Instrument: 100% exam Indicative readingīailey, R.E. **Please note that the exam in May/June 2023 will be Online (24 hour window)** This module is not available to students across other degree programmes in the University. This module is optional for all other Single and Joint Honours degree programmes in Economics. This module is compulsory for BSc Financial Economics and BSc Financial Economics with Econometrics. While the literature has developed a range of innovative techniques to more effectively test competing theories against the data, the answers to a number of key questions remain contested. These challenges are particularly relevant in financial economics. While focusing on financial applications, the module does speak more widely to methodological challenges encountered when testing economic theories against data. This concept is formalised by the Fundamental Theorem of Asset Pricing. While different classes of assets expose their holders to different types of risks, the key principles of asset pricing are common to all asset classes. Third, the module applies the key principles of asset pricing to help understand the behaviour of prices across these asset classes. Second, the module introduces and motivates the use of debt, equity and derivative instruments in financial markets. This helps us determine how the risk and maturity of different assets affects the demand for those assets.įirst, the module introduces the key principles of asset pricing: discounting, diversification, arbitrage and hedging. Specifically, we show how the economics of uncertainty motivates trade in a wide range of financial assets. This module provides an overview of the main instruments in financial markets, the motivation for trade in these assets and the pricing of these assets. ![]()
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