Syllabus.docx - Financial Economics Spring 2019 Instructor...

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Financial Economics Spring 2019 Instructor: Mitchell Post Phone: 703-627-8487 Email: [email protected] Office Hours: Before class and by appointment Overview Finance treats the transfer of resources across time and the transfer of risk among economic entities. The aim of this course is to develop the microeconomic theory relevant to these types of transactions. A set of underlying economic principles is applied to the determination of the value of basic financial instruments such as stocks and bonds, as well as to more complicated derivative securities, such as futures and options. Valuation concepts, in turn, allow for the analysis of various issues of interest to policy makers as well as portfolio managers and investors, such as the term structure of interest rates, portfolio theory, the capital structure of the firm, and risk management. Prerequisite: 440.601 Microeconomic Theory and Policy. Corequisite: 440.606 Econometrics. Learning Objectives Students will gain Familiarity with various concepts in financial economics An ability to evaluate risky corporate projects and make capital budgeting decisions Familiarity with equilibrium models of risk and return and efficient markets An ability to analyze individual savings and portfolio decisions Familiarity with the firm’s capital structure decisions and effects on firm value Familiarity with option and option valuation Familiarity with corporate credit risk and risk management Textbook
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Brearly, Richard A., Stewart C. Myers and Franklin Allen, Principles of Corporate Finance ( BMA) , 12 th Edition, McGraw Hill Education
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Other Readings Other readings include required supplemental items to add depth and perspective and to facilitate understanding. Of these, some will be required. Fama, Eugene F., “Two Pillars of Asset Pricing,” Nobel Prize Lecture, December 8, 2013 Fama, Eugene F. and Kenneth R. French, “The Capital Asset Pricing Model: Theory and Evidence (FF) ,” Journal of Economic Perspectives, Volume 18 Number 3—Summer 2004, pp. 25-46 Mehra, Rajnish, “The Equity Premium: Why is it a Puzzle? (M) ,” Working Paper 9512 National Bureau of Economic Research, February 2003, pp. 54-69. Shiller, Robert J., Speculative Asset Prices (SH) , Nobel Prize Lecture December 8, 2013. Recent articles from the press or periodicals that cover day-to-day real-world applications will be discussed in class or via Blackboard. Blackboard Blackboard will be used to post lecture materials and assignments. For questions and communications about course topics between class meetings, rather than using e-mail, it is preferred that questions be asked within the Blackboard course site in the Discussions area instead of using e-mail. Information (questions and answers) can be shared by everyone in the class.
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  • Fall '16
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