Financial Economics

Release Date: 2017-09-21

Course Name	Financial Economics				Course Number
Course Semester	2	Course Time		2		Credit	2
Course Type	☑Obligatory Courses □ Elective Courses
Institute	School of Finance		Applicable Major	Finance and Related Economics
Assessment method	☑Examination □Test
Advanced courses	Calculus, Probability Theory, Microeconomics
Teacher	Huaihong Diao
Teaching Objectives
Financial Economics aims to provide microeconomic supports for financial theories as a branch for the application in microeconomics. Using the framework of intertemporal consumption decision-making and the optimal model of consumption-saving, the course explains certain pricing peculiarities in order to develop a general relation between finance and microeconomics.
Teaching Contents
Arrow-Debreu Financial Economics focuses on asset pricing and the valuation of risky cash flows. After developing and studying the details of consumer decision-making under uncertainty, it uses that general framework as a basis for understanding both equilibrium and no arbitrage theories of securities pricing, including the Capital Asset Pricing Model(CAPM), the Consumption Capital Asset Pricing Model(CCAPM), Arrow-Debreu theory, martingale pricing method, and the arbitrage pricing theory(APT).
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