Financial Economics - EC822

Location Term Level Credits (ECTS) Current Convenor 2019-20
(version 7)
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7 15 (7.5)







This is a classical module on foundations of advanced financial economics. Emphasizing both analytical techniques and practical knowledge it introduces key economic principles around which financial markets are built worldwide. The module offers an in-depth analytical treatment of pricing techniques, optimal investment strategies and portfolio management solutions, accompanied by quantification of related key financial measures. The module provides a solid platform for understanding, interpreting and developing analytical models of the dynamics of financial markets and making informed decisions on their basis. It is central to students who see their future careers among financial market actors as well as at national or international institutions that oversee and regulate financial market activity.


This module appears in:

Contact hours

30 hours of academic teaching in the form of lectures and seminars

Method of assessment

20% Essay (1,500 words)
80% Examination (2 hours)

Indicative reading

• Back, Kerry. Asset Pricing and Portfolio Choice Theory. Oxford University Press, 2017
• Campbell, John. Financial Decisions and Markets: a Course in Asset Pricing. Princeton University Press, 2018
• Bailey, Roy. The Economics of Financial Markets. Cambridge University Press, 2005
• Cochrane, John. Asset Pricing. (Revised Edition). Princeton University Press, 2005

See the library reading list for this module (Canterbury)

Learning outcomes

On successfully completing the module students will be able to:

• develop systematic and comprehensive analytical understanding of financial theory
• intuitively understand complex fundamental financial concepts
• demonstrate strong abilities to calculate key financial relationships and understand the principles of risk and uncertainty
• have improved their analytical skills in using mathematics to analyse complex dynamics of finance markets
• solve sophisticated financial problems at a high level of abstraction and convincingly present their solutions orally and in written form
• systematically demonstrate analytical skills through the use of advanced mathematic methods to analyse financial markets
• substantially enhance their logical thinking skills through relating intuitive explanations of financial markets and instruments to sophisticated mathematical analysis
• consistently show their ability to independently undertake advanced problem solving
• improve their ability to utilize modern computing resources to access and acquire data from all available sources
• enhance their oral and written ability to present logical solutions to complex financial problems set in exams and assignments

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