ECON 3420 Course Outline

ECON 3420 Course Outline - ECO 3420A Financial Economics...

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1 ECO 3420A Financial Economics (2011-12 Term 1) Prof. Kai-Sun KWONG (x8198) ELB 934 (student visits welcome) Lecture Times: Tuesday 13:30-14:30 ELB LT3 Thursday 10:30-12:30 ELB LT3 Tutorials: Times and Venues to be announced Teaching Assistants 1. AU Siu-Long Office: ELB 1001 Email: ausiulong@hotmail.com 2. DING Yue, Kimmy Office: ELB1001 Email: dingyue09@gmail.com Introduction This course covers the basic theories of financial markets and financial activities. Our point of departure is basic microeconomics. We will study extensions of micro theory to analyze different aspects of financial economics. Our approach differs from that followed in the business school, which emphasizes portfolio management to maximize return for the investor. Our aim is rather to understand conceptually the structure of financial markets, the determination of asset prices, price movements, investment decisions, loan contracts, mergers and acquisitions, and corporate governance. Our approach is scientific and analytical, not operational. This course serves as the foundation course for more specialized courses in the finance concentration. The student will find some overlapping in topics among various courses in the finance concentration. However, each course will treat those topics from a different angle and utilise different examples so as to provide the student with a deep and broad understanding. Course materials are drawn from a wide range of journal articles. Lecture notes and powerpoint slides are posted on WebCT. This course emphasises student interaction and review by peers. Students should expect a high degree of interaction and active engagement throughout the course. Prerequisites Students should have a basic knowledge of microeconomics. Knowledge of linear algebra, differential calculus, accounting, and elementary statistics is also required. Students in their first year of major study are not advised to take this course. Learning Outcomes 1. Understand the factors determining asset prices in equilibrium. 2. Appreciate the arguments and evidence for and against the efficient market hypothesis. 3. Gain insights on various aspects of corporate financial decisions, such as capital structure, loan contracts, mergers and acquisitions, and corporate governance.
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2 4. Have a sense of the language and operations of financial professionals, and the activities of the Hong Kong Stock Exchange. 5. Improve in writing and verbal communication skills. Assessment The assignment of grades will follow the following descriptors. Grade Descriptor A Truly outstanding performance, exceeds expectation of Ug student, able to apply knowledge to novel situations/problems A- Thorough understanding of taught concepts, steady accumulation of knowledge and skills throughout the course B+/B/B- Satisfactory grasp of key concepts, consistent involvement in learning activities C+/C/C- Show fair understanding of key concepts D+/D Some misunderstanding of key concepts, inconsistent efforts observed, much room
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ECON 3420 Course Outline - ECO 3420A Financial Economics...

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