EC349NU-Financial Economics

Module Provider: School of Politics, Economics and International Relations
Number of credits: 20 [10 ECTS credits]
Level:6
Semesters in which taught: Semester 1 module
Pre-requisites: EC113NU Introductory Microeconomics and EC206NU Intermediate Mathematics for Economics
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2022/3

Module Convenor: Dr Fangya Xu
Email: fangya.xu@reading.ac.uk

Type of module:

Summary module description:

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.Ìý

Module Lead at NUIST: Babatunde KazeemÌý(alasinrin@siswa.ukm.edu.my)

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.Ìý

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 intermediariesfacing 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. Selection and pricing of risky assets


3. Capital asset pricing model


4. 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.Ìý

Contact hours:

Ìý	Semester 1	Semester 2
Lectures	84
Guided independent study:	Ìý	Ìý
Ìý Ìý Wider reading (independent)	40
Ìý Ìý Exam revision/preparation	20
Ìý Ìý Advance preparation for classes	10
Ìý Ìý Revision and preparation	16
Ìý Ìý Group study tasks	10
Ìý Ìý Essay preparation	10
Ìý Ìý Reflection	10
Ìý	Ìý	Ìý
Total hours by term	200	0
Ìý	Ìý	Ìý
Total hours for module	200

Summative Assessment Methods:

Method	Percentage
Written exam	50
Written assignment including essay	20
Class test administered by School	30

Summative assessment- Examinations:

One 2-hour unseen written paper, worth 50% of the final module mark.

Summative assessment- Coursework and in-class tests:

Coursework includes two different methods for assessing student’s knowledge. These include: 1) One group essay intended to test student’s ability to read a high-level journal article and provide a referee report based on its contests. 2) An in-class midterm test aimed primarily at ascertaining a student’s understanding and comprehension of a subset of the materials covered during lectures. The exact requirements of the module for a given term will be explicitly detailed in the syllabus handed out at the beginning of each term in which the module is offered. Coursework will count for 50% of the overall grade. The exact weights of the different pieces of coursework required will also be explicitly stated in the syllabus.

Formative assessment methods:

Penalties for late submission:

The Support Centres will apply the following penalties for work submitted late:

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that 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: /cqsd/-/media/project/functions/cqsd/documents/cqsd-old-site-documents/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.

Assessment requirements for a pass:

A minimum overall mark of 40%.

Reassessment arrangements:

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



Re-assessment is by examination only; coursework is not included at the second attempt.

Additional Costs (specified where applicable):

1) Required text books:Ìý

• Frank J. Fabozzi, Edwin H. Neave and Guofu Zhou, Financial Economics, John Wiley and Sons, 2012. It is not essential to buy the hardcopy as copies are available from the library. E-book price is around £30.ÌýHardcover price: amazon price around £47; publisher price around £182


• Mishkin and Eakins, Financial Markets and Institutions, Pearson, 8th edition or above, Global edition, 2016. E-book access is available from the Library at no extra cost. Paperback price: around £64

2) Specialist equipment or materials: None

3) Specialist clothing, footwear or headgear: None

4) Printing and binding: None

5) Computers and devices with a particular specification: None

6) Travel, accommodation and subsistence: None

Last updated: 22 September 2022