Module FINN2071: Intermediate Financial Economics

Department: Finance

FINN2071: Intermediate Financial Economics

Tied To

• N305: Finance
• N306: Finance with Placement Year
• N307: Finance with Study Abroad
• N311: Accounting and Finance
• N312: Accounting and Finance with Placement Year
• N313: Accounting and Finance with Study Abroad

Pre-requisites

Corequisites

Excluded Combinations

Aims

• To develop knowledge of the financial economics; and develop knowledge of using the basic method of economics to analyse financial problems.

Content

• Micro-foundations of asset pricing models.
• Discount factors and pricing kernels.
• The cross section of equity returns.
• Monetary policy, macroeconomic factors and asset prices.
• Asset prices and the business cycle.

Learning Outcomes

• By the end of the module students should be able to understand how financial markets work and how securities are priced.

• By the end of the module students should be able to:
• understand how financial markets work;
• demonstrate and apply the key theory, tools, and terminology of Financial Economics;
• abstract and simplify basic economic problems through the application of simple theoretical methods;
• formalise real world situations by using models and techniques suggested by the theory;
• solve numerically typical problems related to asset pricing and risk management.

• Written communication - through summative assessment.
• Planning and Organising - by preparing for the assignment.
• Initiative - by searching relevant literature and information in preparation for summative assessment.
• Problem Solving and Analysis - by applying the necessary analytical skills, as well as the ability to manipulate concepts in economics, in undertaking assessed work.
• Reasoning abilities - skills in assessing alternative ideas, and the criteria used in accepting or rejecting economic arguments, theories or theoretical systems.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• Teaching is by lectures and computer classes. Learning takes place through attendance at lectures, preparation for and participation in computer classes and private study.
• Formative assessment is by one formative online test and a range of formative exercises that will be completed throughout the module in computer classes.
• Summative assessment is by means of an assignment to assess students' subject-specific knowledge and understanding.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment

A range of exercises will be completed throughout the module in seminars. In addition, the module contains one formative online test.