INGLESE

Students should be familiar with concepts learnt from a course of introductory microeconomics and with core statistical concepts.

The course lasts 11 weeks, with two 2-hour sessions per week. The course consists of lectures, discussion of relevant academic journal articles, uses of case studies and students short presentation based on pre-assigned journal article.

This course provides the basis for the analysis of financial decision. The course give students the main analytical instruments that determine asset pricing and provide specialist knowledge in financial economics, including basic portfolio theory, corporate finance, and pricing theory applied to derivatives and corporate/government bond markets.

After this course students are expected to know how to determine the value of risky investments, how to construct efficient portfolios, and how to identify and exploit arbitrage opportunities.

The students will learn how to use analytical instruments for the analysis of financial decisions. They will be encouraged to develop their critical thinking in order to think and reason with financial concepts as well as discern merits and faults of the journal articles discussed in class. Students will also learn how to present a piece of work and get confidence to speak in front of the class.

- Decision making under uncertainty and portfolio choice (Ch 1 in Pennacchi; Ch 1-4 in Saltari e Di Pietro)
- Mean-variance analysis and classical asset pricing models (Ch 5 and 9 in Cochrane; Ch 2 and 3 in Pennacchi; Ch 5 in Saltari e Di Pietro)
- The Arbitrage Pricing Theory (Ch 3 in Pennacchi; Ch 9 in Cochrane; Ch 7 in Saltari e Di Pietro)
- Derivatives pricing: forwards, future and options (Ch 8-10 in Saltari e Di Pietro)

Grading is based on 1 (take-home) essay, 1 in-class exam (problem sets and theoretical questions, 1 presentation and lecture attendance.

Grading is designed to incentivize students to read and understand the material given throughout the course. Students have to demonstrate a proper use of financial economic concepts and tools for the analysis of financial decisions. Moreover, students are expected to develop and apply their own critical thinking skills, building on the knowledge they have gained over the course.
Students are encouraged to exchange views and collaborate with classmates as long as this is helpful for developing his own assignment. However, students should ensure that any work submitted for grading is the result of his own thoughts and research. Moreover, students are expected to acknowledge someone else’s ideas, and report sources of any written and electronic source consulted and used directly and indirectly. Students caught plagiarizing will be expelled from the course.

The overall course grade is the weighted average of 1 essay (30 percent), 1 in-class exam (60 percent), a presentation (5 percent) and lecture attendance (5 percent). Pass mark is 18 and the maximum final grade is 30 cum laude.

Grading is based on 1 (take-home) essay, 1 in-class exam, 1 presentation and lecture attendance. The essay questions are about concepts developed throughout the course and are due by the end of the 7th week. The in-class exam takes place in the scheduled examination period. Students are also asked to give a short presentation based on a pre-assigned academic journal article. Each presentation should last 10 minutes (max) and include 10 slides (max). Presentation are scheduled for the second part of the course. An attendance sheet will circulate during class. Students will not be penalized for missing one or two lectures. A reasonable justification should be given for more frequent absences.

- Cochrane, J. H., Asset Pricing (Revised Edition), Princeton University Press, 2009
- Pennacchi, G., Theory of Asset Pricing, Pearson-Addison Wesley, 2008.
- Saltari, E. and Di Pietro, M., Introduzione all’economia finanziaria, Società Editrice Esculapio, 2019.

Additional course material, including journal articles and chapters from other books will be distributed throughout the course and will be available on the module's website.