Financial Economics
Financial Economics
Modulleitung
Studiengänge
Masterstudiengang Finance (MSc FI 20)
(01.09.2020)
Masterstudiengang Innovative Finance (MSc IF 24)
(01.09.2024)
Financial Economics provides an introduction to concepts that are fundamental to the understanding of financial decision making.
Key topics covered are:
Key topics covered are:
- Introduction to financial economics
- Equilibrium and arbitrage
- Valuation
- State prices
- Risk-neutral probabilities
- Expected utility, risk aversion, mean-variance theory
- Optimal portfolios
Lehrmethode
- Interactive lecture
- Exercises to be solved individually or in groups between classes.
Lernergebnisse
After successful completion of the course, students will
Professional competences
Methodological competences
Technological competences
Professional competences
- explain the implications of portfolio restrictions in financial markets to clients.
- apply the classical models of risk and risk aversion to practical financial decision making.
Methodological competences
- solve consumption-investment problems in discrete-time market models.
- understand basic principles in financial economics (e.g., absence of arbitrage) and apply them in discretetime market models.
- link absence of arbitrage, state prices and risk-neutral probabilities in complete and incomplete markets
- understand the classical models of risk and risk aversion.
Technological competences
- use R for simple calculations.
Literatur
LeRoy, S. F., & Werner, J. (2014). Principles of financial economics (2nd ed.). Cambridge: Cambridge University Press