EC988: Investment and the Financial System

Zeynep Kurter
Module Leader

15 CATS - Department of Economics

Introduction

EC988-15 Economics of Financial Markets

Principal Aims

This module is designed to provide an overview of the financial markets. It will explain the integration of firms鈥� investment decisions with financial instruments. Key topics include investment related to the bond and stock market, capital asset pricing, consumption-based asset pricing models, and systemic risk.

Students will gain an understanding of the relationship between investment and financial markets. They will learn how the stock market affects investment decisions, how equity and derivative instruments work in financial markets, and why systemic risk is important in financial markets. They will also study models based on capital and consumption-based asset pricing.

Topics in this module include the interplay between the bond market and yield curves, stock market bubbles, and systemic risk in financial markets, firms' investment decisions, the microeconomic foundations of the Capital Asset Pricing Model (CAPM), and consumption-based asset pricing models.

Principal Learning Outcomes

Subject Knowledge and Understanding:...understand changes in financial markets & financial crises.

Subject Knowledge and Understanding:...understand debt and equity securities, firms鈥� investment decisions analysis.

Subject Knowledge and Understanding:...demonstrate a comprehensive understanding of recent advances in financial markets.

Cognitive skills:...critically evaluate selected empirical techniques which form the basis of recent approaches to understanding the behaviour of firms in financial markets.

Subject Specific and Professional Skills:...appraise and synthesise the relevant literature explaining how theories have been tested and the results obtained.

Syllabus

Topics:

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

The syllabus may cover, but is not limited to, the following topics:

1. The Bond Market and Yield Curves

2. Credit Ratings and Credit Default Swaps

3. The Stock Market Investment

4. Systemic Risk in Financial Markets

5. Microeconomic Foundations for Capital Asset Pricing Model (CAPM)

6. Consumption-Based Asset Pricing Models

Context

Optional Module: L1P6 - Year 1, L1P7 - Year 1, L1I1 - Year 1
Pre or Co-requisites: Basic knowledge of calculus and econometrics.

Assessment

Assessment Method: Centrally-timetabled examination (On-campus) (100%)
Coursework Details: Centrally-timetabled examination (On-campus) (100%)
Exam Timing: Summer

果冻传媒

Department of Economics