ECON 351 : Financial Economics
Business and Economics
2020 Semester One (1203) (15 POINTS)
Course Prescription
Course Overview
- The ability to understand the factors that should be brought to bear to assess the value (or price) of a newly introduced asset whose payoffs are contingent on certain outcomes.
- Knowledge of some standard asset pricing models and their usefulness in financial decision making.
- The ability to apply programming tools such as MATLAB to real world derivative pricing.
Course Requirements
Capabilities Developed in this Course
| Capability 1: | Disciplinary Knowledge and Practice |
| Capability 2: | Critical Thinking |
| Capability 3: | Solution Seeking |
| Capability 4: | Communication and Engagement |
| Capability 5: | Independence and Integrity |
| Capability 6: | Social and Environmental Responsibilities |
Learning Outcomes
- Understand and describe the principles underlying the pricing of new financial assets whose payoffs are contingent on certain outcomes. (Capability 1)
- Analyse asset pricing problems and identify possible solutions. (Capability 2 and 4.2)
- Apply some of the general principles of asset pricing for evaluation of contingent contracts. (Capability 1 and 5.1)
- Apply the principles that lead to the efficient formation of portfolios of stocks. (Capability 3 and 6)
- Use MATLAB programming environment to apply asset pricing relations derived from theory. (Capability 3 and 5.1)
- Identify, review, appraise and assemble multiple information sources to produce coherent and well-reasoned analysis of topics set in tests and assignments. (Capability 4.2, 5.1 and 5.2)
Assessments
| Assessment Type | Percentage | Classification |
|---|---|---|
| Assignments | 30% | Individual Coursework |
| Test | 20% | Individual Test |
| Final Exam | 50% | Individual Examination |
| 3 types | 100% |
| Assessment Type | Learning Outcome Addressed | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | |||||
| Assignments | ||||||||||
| Test | ||||||||||
| Final Exam | ||||||||||
- Plussage does not apply.
- The dates for the midterm test and for handing in the assignments will be announced at the beginning of the semester.
Workload Expectations
This course is a standard 15 point course and students are expected to spend 10 hours per week involved in each 15 point course that they are enrolled in.
For this course, you can expect 3 hours per week of lectures and full class tutorials led by the lecturer.
Learning Resources
- William F. Sharpe, “Macro-Investment Analysis”, Stanford University, manuscript, available at http://www.stanford.edu/~wfsharpe/mia/mia.htm
- Sharpe, William F., “Nuclear Financial Economics” in William H. Beaver and George Parker, eds., “Risk Management: Problems & Solutions”, McGraw-Hill, 1995, pp. 17-35.
Digital Resources
Course materials are made available in a learning and collaboration tool called Canvas which also includes reading lists and lecture recordings (where available).
Please remember that the recording of any class on a personal device requires the permission of the instructor.
Additional resources such as solutions to the tutorial exercises, lecture slides, MATLAB codes, MATLAB tutorials etc. will be posted on CANVAS.
Academic Integrity
The University of Auckland will not tolerate cheating, or assisting others to cheat, and views cheating in coursework as a serious academic offence. The work that a student submits for grading must be the student's own work, reflecting their learning. Where work from other sources is used, it must be properly acknowledged and referenced. This requirement also applies to sources on the internet. A student's assessed work may be reviewed against online source material using computerised detection mechanisms.
Inclusive Learning
All students are asked to discuss any impairment related requirements privately, face to face and/or in written form with the course coordinator, lecturer or tutor.
Student Disability Services also provides support for students with a wide range of impairments, both visible and invisible, to succeed and excel at the University. For more information and contact details, please visit the Student Disability Services’ website at http://disability.auckland.ac.nz
Special Circumstances
If your ability to complete assessed coursework is affected by illness or other personal circumstances outside of your control, contact a member of teaching staff as soon as possible before the assessment is due.
If your personal circumstances significantly affect your performance, or preparation, for an exam or eligible written test, refer to the University’s aegrotat or compassionate consideration page: https://www.auckland.ac.nz/en/students/academic-information/exams-and-final-results/during-exams/aegrotat-and-compassionate-consideration.html.
This should be done as soon as possible and no later than seven days after the affected test or exam date.
Student Feedback
At the end of every semester students will be invited to give feedback on the course and teaching through a tool called SET or Qualtrics. The lecturers and course co-ordinators will consider all feedback and respond with summaries and actions.
Your feedback helps teachers to improve the course and its delivery for future students.
Class Representatives in each class can take feedback to the department and faculty staff-student consultative committees.
Student Charter and Responsibilities
The Student Charter assumes and acknowledges that students are active participants in the learning process and that they have responsibilities to the institution and the international community of scholars. The University expects that students will act at all times in a way that demonstrates respect for the rights of other students and staff so that the learning environment is both safe and productive. For further information visit Student Charter (https://www.auckland.ac.nz/en/students/forms-policies-and-guidelines/student-policies-and-guidelines/student-charter.html).
Disclaimer
Elements of this outline may be subject to change. The latest information about the course will be available for enrolled students in Canvas.
In this course you may be asked to submit your coursework assessments digitally. The University reserves the right to conduct scheduled tests and examinations for this course online or through the use of computers or other electronic devices. Where tests or examinations are conducted online remote invigilation arrangements may be used. The final decision on the completion mode for a test or examination, and remote invigilation arrangements where applicable, will be advised to students at least 10 days prior to the scheduled date of the assessment, or in the case of an examination when the examination timetable is published.