AØKA08212U Financial Markets (F)

Volume 2015/2016
Education

Elective at MSc in economics
The course is part of the Financial line symbolized by "F"

MSc programme in mathematics-economics

Content

This course examines the financial markets from a Micro perspective. When traders operate in the financial market, how do they arrive at the transactions prices? How is the traders’ dispersed information incorporated into these prices? What determines the liquidity and depth of an asset market? What is the optimal behaviour for traders in financial markets? Why do bubbles and crashes arise? Do the institutional details of the exchange influence this price formation process? If so, how should exchanges and regulators ideally design the rules of trading? Is there a role for market making, should the market be fully transparent, should insider trading be permitted, should transactions be taxed, and is high-frequent trading good or bad for the market?

Financial economics addresses these and related questions in the field of financial markets’ microstructure. This course seeks to give a broad introduction to the field through a textbook covering theory, evidence and policy. It also provides deeper insight on topics of current interest on the basis of selected current research papers. The lectures will often draw on recent media clippings of relevance for the topic.

Learning Outcome

A strong analytical framework now provides a good understanding of Financial Market issues. Nevertheless, research in this area still leaves many questions open for further investigations. This course partly gives participants a review the facts on financial markets, partly presents the key theoretical models, and partly addresses how the models are applied to the important issues.

The final exam tests the students' specific and general knowledge of the aforementioned aspects of Financial Market theory, emphasizing three abilities:
 

  1. The ability to readily explain and discuss key theoretical concepts and results from academic articles, as well as their interpretation,
  2. The ability to carefully derive and analyze results within an advanced, mathematically specified theoretical model,
  3. The ability to apply the most relevant theoretical apparatus to analyze a given, new case-based problem.

In order to achieve the maximal grade for the course, the student must excel in all three areas.

Syllabus:
  
Thierry Foucault, Marco Pagano and Ailsa Röell: “Market Liquidity: Theory Evidence and Policy,” Oxford University Press, 2013. 439 pages.
 

Various papers that will be announced later.

The course builds mainly on basic Finance, such as may be acquired in the course Corporate Finance and Incentives. We also employ the modelling skills from the bachelor’s courses in Micro.
2 hours of lecturing one to two times a week for 14 weeks

Mostly lectures covering the syllabus with a view towards accomplishing the course goals. Supplemented by problem sets.

Time and room:
For time and classroom please press the link under "Se skema"(See schedule) at the right side of this page (15E means Autumn 2015, 16F means Spring 2016).

You can find the similar information partly in English at
https:/​/​skema.ku.dk/​ku1516/​uk/​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F16;Financial Markets”
-Select Period: “Forår/Spring – Weeks 4-29”
-Press: “ View Timetable”
  • Category
  • Hours
  • Exam
  • 48
  • Lectures
  • 42
  • Preparation
  • 116
  • Total
  • 206
Credit
7,5 ECTS
Type of assessment
Written assignment, 48 hours
An individual 48 hours take-home assignment.
Aid
All aids allowed
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censurship
Exam period

The exam takes place June 28, 2016 at 10am to June 30, 2016 at 10am.    

For enrolled students more information about examination, exam/re-sit, rules etc. is available at the student intranet for Examination (English) and student intranet for Examination (KA-Danish).

Re-exam

The exam takes place August 24, 2016 at 10am to August 26, 2016 at 10am.   

If only a few students have registered for the re-exam, the exam might change to an oral exam including the date for the exam, which will be informed  by the Examination Office mid-August.

Criteria for exam assesment

The student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.