Semester 5: Financial Economics

About the education

If you study at the School of Business, Economics and Law you will take 30 credits at the advanced level in financial economics. The following courses are offered:

EFI255 Financial History, 7.5 credits

All rich countries have well developed financial systems and the importance of financial systems for growth is continuously proved by empirical research. At the same time financial systems are recurrently plagued by crisis and financial actors are often criticized in the public debate for shorttermism and right-out greed. In other words,
financial systems are the epitome of capitalism and to study them raises many central questions: Why are financial systems important? Why do financial crises occur? What kind of ideas and ideologies lies behind different forms of financial theorizing and regulation? The course offers the students the tools to analyse these questions.

The course examines relations between financial theory, financial regulation and market behavior, and the interplay between these spheres over the last two centuries. The course focuses on periods and turning points in economic history, such as financial crises, when this interplay has produced outcomes suitable for analysis and discussion. To advance the skill to pursue such analysis, the course also focuses on the history of ideas and the development of new financial markets and instruments. In the course the students not only deepen their historical frame of reference, but they also develop their skills in recognizing and characterizing financial developments in a larger societal context.

Canvas, course syllabus and reading list

EFI256 Managerial Economics, 7.5 credits

This course covers quantitative methods and models in operations and supply chain management. Operating activities of firms and organizations create value by efficiently transforming inputs into goods and services. The emphasis is on forecasting methods, linear programming, capacity planning, quality management, project management, timetabling, inventory management, and general production planning. 

Throughout the course, students are being trained in formulating and solving problems analytically, as well as using computerized software in the resolution of mathematical problems. In addition, the course includes a case assignment which trains students to collect and manage data, use different types of information technology and apply statistical tools and techniques.

Canvas, course syllabus and reading list

EFI257 Incomplete Financial Markets, 7.5 credits

Most theories that have been discussed in previous courses in finance have implicitly assumed complete markets and that all assets can be traded. A complete market would allow trading in important assets such as human capital or future projects. These features of the economy will lead to allocations and prices that are in-consistent with standard asset pricing models such as "Capital Asset Pricing Model (CAPM)". 

We will in this course show that options can make the market "almost" complete. It is therefore important that the assumptions on which we base our option pricing hold. One such critical assumption is the possibility of short-selling, i.e. selling assets that you do not own. The course also deals with the opposite, for example, when individuals cannot mortgage their future income; and how we should price an option contract to employee's (CEO) that cannot short the underlying asset. 

We will also give a background to Real Options, i.e. methods to evaluate investments where you have the flexibility to defer, expand and abandon the investment. The course will present some theories but is mostly focused on professional implementation of solutions to these problems.

Canvas, course syllabus and reading list

EFI258 Corporate Finance Law, 7.5 credits

This course aims to provide in-depth knowledge about the legal regulation of corporate finance. It is grounded in the legal framework of the different financing options that are available to businesses. The legal issues addressed relate to fields such as contract law, company law, securities law, insolvency law, bankruptcy law, credit law and sales law. The course is delivered with particular focus on UK and EU law and regulation. In addition, the course draws on the approaches to regulation in other jurisdictions, such as the United States.

Canvas, course syllabus and reading list

If you study abroad, at least 15 credits must be within the finance field, and the remaining 15 credits within financial economics, business economics, and/or economics. Check with the study counsellor.

If you choose to study abroad, you will find course syllabi at the institution where you are studying.

Eligibility description

Completed courses from semester 4: Econometrics (NEK206), Financial Accounting and Financial Statement Analysis (EFI202), Microeconomic Theory (NEK203), and Financial Economics (EFI242).