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

LESSONS

LESSONS START

Mid February 2026

Class schedule

The timetable for this course is available here: Portale EasyAcademy

EXAMS

EXAM DESCRIPTION

For students who attend the course:

40% of the final mark will depend on a written exam (that can be also done at the end of May, before the official beginning of the exam period) on the topics covered in the class (SEE SYLLABUS below)

30% of the final mark on a topic presented in front of the class in May and chosen among a list that I will provide and present in March.

15% of the final mark on a simple homework: you have 1 million euros and you have to choose how to invest it. Feel free to allocate the money as you wish. In the first week of March you send me by mail a brief report in which you present your portfolio decisions. Mid May, you will send me another document (more detailed this time) in which you motivate why and how you gained or lost money.

15% on the final mark on a homework based on a mean variance exercise using Python.

For students who do not attend the course:

90% of the final mark will depend on a written exam (that can be also done at the end of May, before the official beginning of the exam period) on the topics covered in the class (SEE SYLLABUS below)

10% of the final mark on a simple homework: you have 1 million euros and you have to choose how to invest it. Feel free to allocate the money as you wish. In the first week of March you send me by mail a brief report in which you present your portfolio decisions. Mid May, you will send me another document (more detailed this time) in which you motivate why and how you gained or lost money.

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.

FURTHER INFORMATION

Contact the teacher for further information