AIMS AND CONTENT

LEARNING OUTCOMES

The objective of the course are: (i) to make students understand the basic assumptions underlying the economic behaviour under uncertainty; (ii) to equip them with the technical tools adopted in neoclassical financial economics to model the price of securities; (iii) to make students aware of the shortcomings of such a neoclassical approach, putting particular emphasis on some empirical/theoretical puzzles such as the equity premium puzzle and the risk free interest rate puzzle.

PREREQUISITES

None.

TEACHING METHODS

In the first part of the course I will present the issues enumerated in the syllabus

In the second part of the course the class will be divided in small groups. Each group will be assigned a topic to study and present to the entire classroom.

SYLLABUS/CONTENT

1. A look at the data: the stock market, the bond market, and the real estate market in historical perspective.
2. Are security prices predictable? Bachelier vs Dow.
3. The mean variance approach and the two-fund separation theorem
4. CAPM and subsequent refinements.
5. The equity premium puzzle
6. Consumption ans savings under uncertainty.
7. The risk free interest rate puzzle.

RECOMMENDED READING/BIBLIOGRAPHY

For points 1, 2, 3, 4:

R. Shiller, Irrational Exuberance,  Princeton University Press (third edition)

P. L. Bernestein, Capital ideas, Wiley. 

For points 5, 6, and 7:

L. Eeckhoudt, C. Gollier, H. Schlesinger, Economic And Financial Decisions Under Risk, Princeton University Press 

TEACHERS AND EXAM BOARD

Exam Board

GABRIELE CARDULLO (President)

MARCO GUERRAZZI

LESSONS

LESSONS START

mid september 2020

Class schedule

The timetable for this course is available here: Portale EasyAcademy

EXAMS

EXAM DESCRIPTION

Written exam (with both quantitative and qualitative questions) for the first part. In the second part, each student is required to study an article (chosen from a list complied by the teacher) and present it to the class.

ASSESSMENT METHODS

Each student will be able to understand the different theories advanced to understand the financial markets.. In addition, the second part of the course will be useful to evaluate the ability to understand complex issues and explain them to other people.

Exam schedule