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FINANCIAL ECONOMICS

CODE 95175
ACADEMIC YEAR 2022/2023
CREDITS
  • 6 cfu during the 2nd year of 11267 ECONOMICS AND DATA SCIENCE (LM-56) - GENOVA
  • SCIENTIFIC DISCIPLINARY SECTOR SECS-P/01
    TEACHING LOCATION
  • GENOVA
  • SEMESTER 2° Semester
    TEACHING MATERIALS AULAWEB

    OVERVIEW

    The course aims to present the main open questions debated in financil economics, trying to figure out why solutions offered by scholars and specialists are often divergent and not conclusive.

    In order to understand these topics it is important to master some basic techniques, that will be studied in the first part of the course

    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.

    AIMS AND LEARNING OUTCOMES

    Knowledge of the behaviour of the financial markets in a long run perspective

    Understanding  of the main puzzles in financial economics (active vs passive management, value premium, risk free rate puzzle, equity premium puzzle, speculative bubbles) and of the possible solutions offered by specialists and in the scientific literature.

    Ability to collect research on a specific topic and  to present it to the public.

    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

     

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

    P. L. Bernestein, Capital ideas, Wiley. 

     

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

     

    TEACHERS AND EXAM BOARD

    Exam Board

    GABRIELE CARDULLO (President)

    LESSONS

    LESSONS START

    Mid September 2022

    Class schedule

    All class schedules are posted on the EasyAcademy portal.

    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

    Date Time Location Type Notes