Programme And Module Handbook
Course Details in 2020/21 Session

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Module Title LH Economics of Financial Markets
SchoolBirmingham Business School
Department Birmingham Business School
Module Code 08 08380
Module Lead John Fender
Level Honours Level
Credits 10
Semester Semester 2
Restrictions Available to all students who have been allowed onto the second year of a degree programme in the Department of Economics (including Joint Honours) or who have passed 08 28536 LI Microeconomics and 08 29189 Macroeconomics
Contact Hours Lecture-20 hours
Guided independent study-80 hours
Total: 100 hours
Description This module examines economic theories of financial market behaviour and discusses their empirical relevance. A prime focus is the determination of asset prices. The first part of the module concentrates on bond markets. It discusses how bond prices are determined and the term structure of interest rates. The second part of the module explores portfolio allocation decisions, using the Mean-Variance model of Markowitz and the Capital Asset Pricing Model (CAPM). The third part of the module explores the efficiency of financial markets (particularly stock markets). The determination of share prices and the Efficient Markets Hypothesis are discussed, as well as some of the many stock market ‘anomalies’. This leads us on to a discussion of bubbles and crashes and the implications of heterogeneous investors for asset market behaviour. If time permits, we will finally discuss the implications of what we have learned in the course for both policy and investor behaviour.
Learning Outcomes

On completion of this module students should be able to:

  • demonstrate systematic knowledge and understanding of the microeconomic basis of financial economics; 
  • analyse the behaviour of asset markets and prices using theoretical models;
  • apply these models to specific context and critically evaluate their empirical implementation.
Assessment 08380-01 : Exam : Exam (Centrally Timetabled) - Written Unseen (50%)
08380-03 : Canvas weekly quiz 1 : Class Test (5%)
08380-04 : Canvas weekly quiz 2 : Coursework (5%)
08380-05 : Canvas weekly quiz 3 : Coursework (5%)
08380-06 : Canvas weekly quiz 4 : Coursework (5%)
08380-07 : Canvas weekly quiz 5 : Coursework (5%)
08380-08 : Canvas weekly quiz 6 : Coursework (5%)
08380-09 : Canvas weekly quiz 7 : Coursework (5%)
08380-10 : Canvas weekly quiz 8 : Coursework (5%)
08380-11 : Canvas weekly quiz 9 : Coursework (5%)
08380-12 : Canvas weekly quiz 10 : Coursework (5%)
Assessment Methods & Exceptions Assessment: Weekly Canvas quizzes (10 x 5% = 50%), 1-hour final exam (50%).
Reassessment: by failed element
Other Duplicate of Dubai-based module 08 30413
Reading List Keith Pilbeam, Finance & Financial Markets, Palgrave Macmillan, fourth edition (if available), otherwise third edition (2010).