EC349-Financial Economics

Module Provider: School of Politics, Economics and International Relations
Number of credits: 20 [10 ECTS credits]
Level:6
Terms in which taught: Autumn term module
Pre-requisites: EC113 Introductory Microeconomics and EC115 Introductory Quantitative Methods in Economics and Business 1 or EC113 Introductory Microeconomics and IC104 Introductory Quantitative Techniques for Business and Finance or IC103 Introductory Economics for Business and Finance and IC104 Introductory Quantitative Techniques for Business and Finance
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Module version for: 2017/8

Module Convenor: Dr Minyan Zhu

Email: minyan.zhu@reading.ac.uk

Summary module description:

Aims:

This module aims to provide a rigorous coverage of the economic reasoning underpinning much of modern finance including portfolio theory and asset pricing. It will apply neoclassical financial analysis both as intellectual contributions in their own and as a set of guidelines to financial decision making in the more complex world of uncertainty and market imperfections. It will also discuss the organisation of a modern financial system highlighting the role of financial intermediaries such as banks, facing market imperfections. 


Assessable learning outcomes:

By the end of the module, it is expected that the student will be able to




  • Explain how individuals and firms make financial decisions under certainty

  • Discuss the models informing investment decisions relating to forming investment portfolios and pricing risky assets

  • Evaluate how capital market imperfections impact the financial theory in the neoclassical environment

  • Appreciate the role of financial intermediaries facing capital market imperfections.


Additional outcomes:

Students will improve their ability to translate abstract theoretical concepts into practical solutions to financial problems.


Outline content:


  1. Individuals’ and firms’ financial decisions under certainty and in a perfect capital market

  2. Introducing tools for coping with risk

  3. Selection and pricing of risky assets

  4. Capital market imperfections

  5. Organisation of a modern financial system and the role of financial intermediaries


Brief description of teaching and learning methods:

Lectures. There will be discussions led by the lecturer covering non-assessed structured problems. 


Contact hours:
  Autumn Spring Summer
Lectures 20 2
Guided independent study 157 21
       
Total hours by term 177.00 23.00
       
Total hours for module 200.00

Summative Assessment Methods:
Method Percentage
Written exam 70
Written assignment including essay 30

Other information on summative assessment:

Formative assessment methods:

Penalties for late submission:
The Module Convenor will apply the following penalties for work submitted late, in accordance with the University policy.

  • where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;
  • where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

  • The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf
    You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

    Length of examination:

    One 3-hour unseen written paper.

    Part 3 examinations are held in the Summer term.


    Requirements for a pass:

    A minimum overall mark of 40%.


    Reassessment arrangements:

    Re-examination for all modules takes place in August of the same year.

    Reassessment is by exam only.


    Additional Costs (specified where applicable):

    Last updated: 31 March 2017

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