This course deals with the theory and practice of financial economics. The course starts with financial decisions under certainty and uncertainty: the utility approach and the mean-variance approach. Based on these basic theories students will be exposed to market equilibrium models: capital asset pricing model, arbitrage pricing models and their variants, and efficient market hypothesis. The course also deals with capital structure theory, valuation of bonds and shares, derivative markets, option and futures pricing theory.
Programme: ECON(HSS)
This course deals with the theory and practice of financial economics. The course starts with financial decisions under certainty and uncertainty: the utility approach and the mean-variance approach. Based on these basic theories students will be exposed to market equilibrium models: capital asset pricing model, arbitrage pricing models and their variants, and efficient market hypothesis. The course also deals with capital structure theory, valuation of bonds and shares, derivative markets, option and futures pricing theory.