This module is not currently running in 2024 to 2025.
The module will review the principles of financial economics in the form of approaches required to understand the value of risky assets. It will then provide the foundations for understanding and evaluating asset pricing models, using both equilibrium and no arbitrage approaches. Finally, it will introduce students to new developments in the field of asset pricing and the challenges that lie ahead for the discipline of financial economics.
Total contact hours: 36
Private study hours: 114
Total study hours: 150
Main assessment methods
Individual Report (2000 words) (50%)
Examination, 2 hours (50%)
Reassessment method:
100% examination
Cochrane, J. (2001), Asset Pricing, Revised Edition, Princeton, NJ: Princeton University Press.
Danthine, J-P.; J. Donaldson (2015), Intermediate Financial Theory, Third edition, MA: Academic Press.
Elton, E. J.; Gruber, M. J., Brown, S.J. and Goetzmann, W.N. (2014) Modern portfolio theory and investment analysis, 9th Edition, Hoboken, NJ; Wiley.
See the library reading list for this module (Canterbury)
The intended subject specific learning outcomes.
On successfully completing the module students will be able to:
1 Show a systematic knowledge, understanding and critical awareness of portfolio theory.
2 Show a comprehensive understanding of the complex techniques applicable to solve problems in portfolio theory and asset pricing modes.
3 Appreciate recent developments and methodologies in economics and the links between economic theory and its practical application and to critically evaluate such methodologies.
The intended generic learning outcomes.
On successfully completing the module students will be able to:
1 Adopt a logical mathematical approach to solving complex problems including cases where information/data is not complete.
2 Exhibit skills in written communication to both technical and non-technical audiences
3 Use of relevant information technology.
4 Implement effective time management, organisation and studying so that tasks can be planned and implemented at a professional level.
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